Debt Service Suspension Initiative (DSSI) was adopted in May 2020.[1] To tackle the Covid-19 health and economic crisis, development banks suspended debt service payments from the poorest countries that asked this suspension.[2] Thus 73 low- and lower-middle-income countries could devote to COVID-19 expenses the money they should have paid for their debts with these banks: US$4.6 billion.[2] DSSI was further complemented by additional financing provided by the World Bank, the International Monetary Fund and other development banks.[2] DSSI expired at the end of December 2021.[1]
Beneficiary countries
The countries which suspended their debt service under DSSI were Afghanistan, Angola, Burkina Faso, Burundi Cabo Verde, Cameroon, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Republic of Congo, Côte d'Ivoire, Djibouti, Dominica, Ethiopia, Fiji, The Gambia, Grenada, Guinea, Guinea-Bissau, Kenya Kyrgyz Republic, Lesotho, Liberia, Madagascar, Malawi, Maldives, Mali, Mauritania, Mozambique, Myanmar Nepal, Niger, Pakistan, Papua New Guinea, Samoa, Sao Tome and Principe, Senegal, Sierra Leone, St. Lucia, St. Vincent and the Grenadines, Tajikistan, Tanzania, Togo, Tonga, Uganda, Yemen and Zambia.[1]
Requirements
Each beneficiary country will be required:
- to use the created fiscal space to increase social, health or economic spending in
response to the crisis;
- to disclose all public sector financial commitments, respecting commercially
sensitive information; and
- to contract no new non-concessional debt during the suspension period.[3]
Common Framework
After DSSI (a provisional scheme) expired, the G20 established a permanent mechanism to help low-income countries dealing with huge debt: the Common Framework.[4] But only four countries have asked to restructure their debt under this mechanism: Chad, Ethiopia, Zambia and Ghana.[4]
See also
References
- ^ a b c "Debt Service Suspension Initiative". WB. The World Bank. Retrieved 21 May 2024.
- ^ a b c "Debt Service Suspension Initiative: Q&As". WB. The World Bank. Retrieved 21 May 2024.
- ^ "Debt service suspension initiative for the poorest countries-Term sheet". Trésor de France. Retrieved 22 May 2024.
- ^ a b Biswajit Dhar (8 September 2023). "Why G20's debt-relief strategy is failing". Retrieved 21 May 2024.