UK government must support expanded debt relief at Brisbane G20 this weekend.
Jubilee Debt Campaign has welcomed a call by US officials for emergency debt relief from the IMF 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 the IMF cancel $100 million of Liberia, Sierra Leone and Guinea’s debt of $372 million to the IMF. The debt to the IMF is just a small portion of the three countries’ 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. 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 of profit over the last 3 years, which is sitting unspent in its reserves.
Sarah-Jayne Clifton, Director of the Jubilee Debt Campaign, said:
“Countries 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 the G20 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 the World Bank. And once the immediate crisis is averted these lenders must take responsibility for the devastating impact their structural adjustment programmes have had the state of healthcare systems in west Africa and the capacity of governments to tackle this crisis.”