The International Monetary Fund announced Thursday $100 million in debt relief for the three West African countries struck hardest by the Ebola epidemic.
Managing Director Christine Lagarde said the move made the Fund the first multilateral institution to help ease the debt burdens of Liberia, Sierra Leone, and Guinea, and said others needed to follow suit.
“I’m calling on the international creditors to also consider debt relief to these three countries,” Lagarde said.
The IMF has already received a commitment to that end from one major donor, she added.
“I hope that they will not be the only one.”
The Ebola outbreak, which began a year ago, has killed around 9,000 people mostly in the three countries, and savaged their economies and government finances.
The IMF and World Bank have repeatedly warned that the countries need more support, including loan writeoffs, to be able to focus on restoring growth.
“Our membership has demonstrated great commitment in coming together to respond to the Ebola crisis,” Lagarde said.
The IMF’s debt relief will come under a new Catastrophe Containment Relief Trust. It will provide the three countries with $100 million to cover their debt-service payments to the IMF over the next two years.
The trust will be a permanent fund to help countries beset by large natural disasters like epidemics and massive earthquakes.
It will replace the Post Catastrophe Debt Relief Trust organized to support Haiti after its devastating 2010 earthquake. That trust’s mission was not broad enough to include epidemics.
Lagarde said she will be asking members of the Group of 20 leading economies for contributions to the new trust to meet its future needs.
Lagarde stressed that such grants are not part of the normal mission of the IMF, the world’s crisis lender.
But she said the three countries have endured “a very, very dramatic ordeal.”
$160mn in new funding
Lagarde said that the IMF is also preparing new ultra-low interest rate loan funding for Liberia, Sierra Leone, and Guinea of $160 million, on top of $130 million extended in September 2014.
“The unique feature of this IMF money is its immediate disbursement,” she said, amid criticism that the money from other pledges of millions of dollars in Ebola relief from bilateral and multilateral lenders has been slow in coming.
Nicolas Mombrial, the Washington representative of global poverty relief group Oxfam, applauded the IMF plan.
“The IMF’s move will provide welcome relief to countries whose economies have been devastated by Ebola.
“Instead of struggling to repay all their debt, governments will now be able use this money to invest in jobs, better healthcare and more health workers, and supporting people who have lost their means of earning a living due to the crisis.”
But he said it was not enough by itself.
“It needs to be the start of a concerted global effort to help these countries back on their feet. International donors now need to step up and do their bit.” (AFP)
