Sierra Leone: G20 Finance Ministers and Central Bank Governors (FMCBG) will gather virtually, on Wednesday 7th April 2021, for the second G20 Finance Track Ministerial meeting under the Italian G20 Presidency.
World Bank Group President David Malpass will address the media during the World Bank Group/International Monetary Fund Virtual Spring Meetings later today on the outcome of the G20 meeting and also share his views on the key outcomes from the G20 discussions.
He will also report on the World Bank Group’s response to the global crisis caused by the COVID-19 pandemic. This year again, due to the coronavirus, the Management of the International Monetary Fund and World Bank Group and their Executive Boards are adapting the 2021 IMF-World Bank Spring Meetings to a virtual format.
On Monday, 5th April, 2021, Malpass said he expects G20 countries to extend debt payment moratorium for the poorest countries until the end of the year.
The program was first implemented last year amid the Covid-19 pandemic, which hit poor countries the hardest, as business and trade shutdowns made it hard for those governments to service their debt and support their people.
The G20 in October agreed to a six-month extension, until June 30. However, Malpass said poor countries will need actual debt relief in the longer term since even with the temporary moratorium on debt payments, the overall burden in many cases is unsustainable.
The overall amount of relief depends on how many countries request to benefit from the DSSI. As of 8th March, 2021, more than 60 percent of the eligible countries have made requests for the debt service suspension.
According to IMF data, in 2020, 43 countries are estimated to have benefited from US$5.7 billion in debt service suspension. The six-month DSSI extension through June 2021 could provide an additional US$7.3 billion of debt service suspension for the participating countries as of 8th March, 2021.
For now, G20 bilateral official creditors have agreed to extend the initial debt service suspension by six months until end of June 2021. The G20 initially agreed to examine the need for a further extension by the time of the IMF-World Bank Spring Meetings in April 2021. The IMF supports an extension of the DSSI until end-2021.
Sierra Leone is one of the participating countries of the DSSI. The country is currently ranked high for both ‘risk of external debt distress’ and ‘risk of overall debt distress’. Its last Joint World Bank-IMF Debt Sustainability Analysis (DSA) was published in June 2020. In addition, the country has a potential DSSI Savings from May-December 2020 of 0.25% of GDP or SDR 8.1million (US$11.5 million) and another potential DSSI Savings from January-June 2021 of an added 0.25% of GDP or SDR 6.9million (US$ 9.8 million).
By [email protected]