© Reuters. FILE PHOTO: The logo of the International Monetary Fund (IMF) is seen outside its headquarters building in Washington, U.S., September 4, 2018.REUTERS/Yuri Gripas/File Photo
WASHINGTON (Reuters) – The International Monetary Fund on Thursday called on the creditor committees of Chad, Ethiopia and Zambia to quickly reach an agreement with authorities to restructure the countries’ debts, saying it could unlock the IMF’s financing plans and pay for them payment.
IMF spokesman Gerry Rice told a news conference that discussions between the IMF and Chad, which was the first country to seek help under the common G20 framework, had progressed, but it needed to include mining reached a debt deal with creditors including trading giant Glencore (OTC). 🙂 Unlock IMF funds.
“So, the Chad creditors committee, we want to continue to meet,” Rice said. “We believe it is critical to reach a speedy agreement again with all creditors, including Glencore, so that we can submit a first review under our ongoing arrangements with Chad.”
Rice said the debt restructuring deal would allow the IMF to seek board approval for a review of Chad’s $571 million extended credit agreement, which would free up some financial support for the country.
In June, three senior Chadian officials were arrested and fired for allegedly embezzling funds from the state-owned oil company.
One-third of the country’s external debt burden comes from commercial creditors, almost all of which came from Glencore’s oil-for-cash deals in 2013 and 2014.
Ahead of a bilateral creditor meeting on Wednesday, the scandal had private creditors on hold on whether to agree to further relief on oil-backed loans that had been restructured in 2018, according to sources familiar with the thinking of private creditors.
A Glencore spokesman declined to comment.
Zambia, another early candidate for debt restructuring under the G20 framework, is expected to meet its creditors committee on Monday, July 18, Zambia’s finance minister said on Wednesday.
If an agreement is reached on Zambia, the IMF can continue to consider new financing plans after the August recess, Rice said, adding: “So we may look again around early September, assuming those are in place.”
On Ethiopia, he said the IMF would meet with the East African country’s creditor committee next week to provide an update on its economic situation, but declined to comment on the impact of Ethiopia’s ongoing civil war on debt talks.
The G20 Common Framework was launched in 2020 to ease debt restructuring efforts after poorer countries succumbed to the effects of the COVID-19 pandemic.
However, progress has been slow so far, with IMF and World Bank officials outspoken about the failure of the common framework. They are pushing finance officials from major G20 economies to put more pressure on China and private sector creditors to engage.