IMF grants $100mn debt relief to Ebola-hit countries

Saturday, February 07, 2015
IMF chief Christine Lagarde
[PHOTO: UNifeed] 
Washington: The IMF will provide grants totaling $100 million to be used as debt relief to the three countries worst hit by the Ebola epidemic.

Guinea, Liberia, and Sierra Leone will use the funds to cover the cost of servicing their debt.

"So the IMF is giving debt relief to these three countries through the catastrophe containment and relief trust which will provide grant aid used to relieve the debt for the next two years," IMF Managing Director Christine Lagarde said.

Lagarde said that the IMF was stepping outside its traditional lending mandate to create a formal channel for debt relief because of the difficult circumstances of the countries affected by Ebola.

"Those three countries are going through a very, very dramatic ordeal that combines pandemics, the risk of isolation, which is why I'm wearing, still, my badge, isolate the virus, not the countries.  And that virus has the potential to spread out in the country, in the neighboring countries, and elsewhere," Lagarde said.

The IMF Managing Director said that she is also calling on other official bilateral creditors to consider debt relief for the three countries.

"I have actually received already from one major donor a commitment to provide additional funding, and I hope that they will not be the only one.  That there will be more that will follow suit," Lagarde said.

These grants come in addition to $130 million in emergency assistance the IMF disbursed in September under an existing loan program, as well as about $160 million in additional loans to the three countries proposed for IMF Executive Board approval later this month.

"The beauty of what the IMF does, once again, is that once it's approved, within a matter of a few days cash is in the bank," Lagarde said.

The money for the grants comes from a newly created Catastrophe Containment and Relief Trust (CCR), replacing the trust fund that was established to help Haiti recover from the devastating earthquake in 2010.

The new trust will be a permanent feature and in the future will make available grants to provide debt relief to eligible low-income countries recovering from a catastrophic natural disaster or seeking to contain the potentially catastrophic spread of a life-threatening epidemic within and across international borders.

The debt relief initiative and additional lending to the Ebola-hit countries were outlined by IMF Managing Director Christine Lagarde to the G-20 heads of state in Brisbane, Australia. This is the first time that the Fund has provided grants to support a country in containing an evolving natural disaster with international spillover effects. -UNifeed
Next Post »