The World Bank and the International Monetary Fund (IMF) have disclosed plans to fast track the implementation of the G20 debt relief scheme.
The announcement was made at the ongoing 2022 Spring Meetings of the World Bank-IMF in Washington DC.
In November 2020, the G20 reached an agreement on a Common Framework to deal with insolvency and liquidity problems in DSSI-eligible countries, including Nigeria.
At a briefing attended by IMF Managing Director Kristalina Georgieva, World Bank President David Malpass said the institutions would help debtor nations achieve development and macro-economic stability.
These include strengthening institutions and the capacity needed to improve debt transparency, developing mechanisms to resolve private-sector debt overhangs, and delivering effective financial sector supervision.
Others are improving access to long-term finance and enabling financial deepening that reduces the cost of investment and allocates risk.
“The ongoing war in Ukraine and weak economic outlook with rising inflation and the likely tightening in financing conditions will make the debt burden worse.
“Our goal is expeditious debt relief that would restore these countries to debt sustainability”, Malpass noted.
Admitting that the execution of the G20 Common Framework has been slow, the chief listed four priorities identified by the World Bank and IMF teams.
They include quicker and more efficient processes through time-bound steps in the implementation and the introduction of a debt service standstill to address the liquidity needs of countries requesting treatment, with no penalty interest.
Others are greater clarity on how official bilateral creditors will enforce and evaluate the comparability of treatment; and expansion of coordinated debt treatments to non-DSSI eligible countries with debt vulnerabilities.
Malpass added that the priorities were tailored to current circumstances, while also heeding the lessons of past debt crises and restructurings.