IMF write-downs make up only 1% of all low-income country debts 

14 April 2020

IMF write-downs make up only 1% of all low-income country debts 

  • $215 million promised is only 1% of all Global South debts due in 2020
  • Ebola loans make up some of debts now being written off    

Irish campaigners have welcomed the announcement by the IMF today that it will cancel $215 million of debt payments for 25 countries over the next six months due to the coronavirus pandemic, but say it falls short of what is required.

Director of Financial Justice Ireland – the NGO that campaigns for debt relief for the global south – Maeve Bateman said

"While this announcement is very welcome, it is simply not adequate to address the impact debt burdens have on developing countries impacted by Covid 19.

"Some of the debts cancelled today will be loans received in response to the 2014 Ebola pandemic. Three of the top five recipients are Guinea, Liberia and Sierra Leone, who all received loans from the IMF in response to Ebola.

"The debt hangover from the Ebola crisis demonstrates that we must respond to global health crises with aid - not loans. The coronavirus response will require upwards of $70billion in aid, if countries are to escape a new debt crisis.

"The debt hangover from the Ebola crisis also demonstrates the need to go beyond an ad hoc response and look at a systemic reworking of the debt system, particularly the need for a UN-led debt workout process."

"The $215 million debt write off announced today represents less than 1% of all debt repayments owed by low-income countries this year. That means that poor countries faced with tackling the Coronavirus will still be forced to repay 99% - over $24billion - of their debts, in 2020."

Financial Justice Ireland, along with many other Irish NGOs and over 200 organisations internationally, are signatories to a statement calling for cancellation of debts for countries in the global south affected by Covid 19, a debt workout mechanism and for the response to the crisis to be funded through additional grants, not loans.

The Irish signatories to that statement are:

80:20 Educating & Acting for a Better World
ActionAid Ireland
Centre for Global Education
Christian Aid Ireland
Financial Justice Ireland
Friends of the Earth Ireland
Jesuit Centre for Faith and Justice, Ireland
Missionary Society of St. Columban, Ireland
SMA Justice Office, Society of African Missions, Ireland
Trademark Belfast

The full statement signed by 240 organisations globally can be found here.