Debt Relief: IMF Raises Hope For Chad

(AFRICAN EXAMINER) – Sequel to the statement issued on Wednesday by the Creditor Committee for Chad under the Common Framework for Debt Treatments, the International Monetary Fund (IMF), has ignited a flicker of hope for the West African country.

Managing Director of IMF, Ms. Kristalina Georgieva has applauded the statement by the Committee’s statement, noting that it is a key milestone on the path to the debt relief that Chad urgently needs, together with envisaged financial support from IMF, the World Bank, and other development partners.

The statement, according to her, also demonstrates concrete progress in implementing the G20’s Common Framework, which sends a positive signal to other countries that may need debt treatments to support a strong and lasting recovery from this unprecedented crisis.

“Let me thank each of the members of the Creditor Committee for their intensive work on Chad’s requested debt treatment, including their recognition of Chad’s dire economic and financing situation following the combined shocks of the COVID-19 pandemic, oil-price decline, climate change, and terrorist attacks.

“These shocks, together with the measures taken to contain the spread of the pandemic, have had a contractionary impact on the economy and exacerbated poverty, generating significant financing needs and leading to Chad’s debt being assessed as unsustainable, despite the fiscal efforts and structural reforms under the envisaged IMF‑supported programme. A debt treatment is therefore critical to move forward”, she said.

She also noted that the Creditor Committee’s support for Chad’s envisaged IMF-supported programme, together with its commitment to negotiate debt restructuring terms, accordingly, provides the IMF with official financing assurances.

Ms. Georgieva further explained that speedy steps towards debt treatments by Chad’s private creditors, on comparable terms to the debt treatment under the Common Framework, are now essential to pave the way for the IMF Executive Board to consider approval of a Fund-supported programme for Chad.

“I therefore strongly endorse the call by the Creditor Committee for private creditors commit to negotiate such debt treatments without delay.

“Approval of such a programme by the IMF Executive Board will in turn facilitate much needed financing from Chad’s main development partners in support of the authorities’ IMF‑supported reform and stabilization programme, helping to put the economy on a sustainable path of growth and poverty reduction”, she stressed.