ByÂ Jubilee Debt Campaign (13 NovÂ 2014)
The UK government must support expanded post-catastrophe fund at Brisbane G20 this weekend.Â
Jubilee Debt Campaign has welcomed a call by US officials for emergency debt relief from theÂ IMFÂ for Liberia, Sierra Leone and Guinea to help tackle the Ebola outbreak, but warned that further cancellation is needed to ensure the fight against Ebola is not undermined by debt payments.
Reuters have reported that US officials have proposed theÂ IMFÂ cancel $100 million of Liberia, Sierra Leone and Guineaâ€™s debt of $372 million to the IMF.Â |1| The debt to the IMF is just a small portion of the three countriesâ€™ total foreign debt of $3,600 million. They are spending a combined $100 million on debt payments to all their lenders in 2014, rising to $130 million in 2015, of which 25% is to the IMF.Â |2| Since the Ebola outbreak began, a further $128 million of lending has been announced by the IMF to the three countries, further adding to their debt burden.
The US proposal is for the IMF to compensate itself for cancelling the debt through the Post-Catastrophe Debt Relief Trust, set up after the Haitian earthquake of 2010. However, in addition to this fund, the IMF also has made $8.8 billion ofÂ profitÂ over the last 3 years, which is sitting unspent in its reserves.Â |3|
Sarah-Jayne Clifton, Director of the Jubilee Debt Campaign, said: â€œCountries at the frontline of the Ebola crisis are losing millions of dollars in debt payments while their healthcare systems are close to collapse.. Debt cancellation is a fast and effective way to free up resources for governments fighting this terrible disease, and recognition of this by the US is a welcome step, which theÂ G20Â must support it this weekend”.
But the G20 needs to go further. All IMF debt should be covered, as should those to other lenders like theÂ World Bank. And once the immediate crisis is averted these lenders must take responsibility for the devastating impact theirÂ structural adjustmentÂ programs have had the state of healthcare systems in west Africa and the capacity of governments to tackle this crisis.â€Â |4|
For more information and interviews contact Tim Jones on +44 (0)7817 628196
|1| U.S. urges IMF to cancel debt of Ebola-stricken countries,Â http://www.reuters.com/article/2014…
|2| Figures on the three countries debt and current debt payments are from recent Debt Sustainability Impact Assessments by the IMF and World Bank. Reuters state that $55 million of the three countries debt payments over the next two years are to the IMF.
|3| Financial Statements of the IMF (Various)Â http://www.imf.org/external/pubs/ft…
|4| West Africaâ€™s Financial Immune Deficiency, Foreign Policy magazine, 30 October 2014,http://www.foreignpolicy.com/articl…