Ver Angola

Economy

G20 announces extension of suspension of debt payments until March 2021

G20 governors and finance ministers announced Wednesday that they agreed to an extension of the Debt Service Suspension Initiative (DSSI) until March of next year, with the possibility of extending it for another six months.

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"Due to continued liquidity pressure, while countries progressively address debt vulnerabilities, we agreed to extend the DSSI for six months, and to examine at the Spring Meetings of the International Monetary Fund (IMF) and the World Bank whether the economic and financial situation requires another six-month extension," reads the communiqué released this Wednesday afternoon following the virtual meeting of governments.

"We remain committed to continue working together to support the poorest countries in a context where they are dealing with the health, social and economic challenges associated with the covid-19 pandemic," the communiqué also states, thus responding positively to various requests from finance ministers in developing countries, particularly Africans, regarding the need to extend debt relief.

The G20 governors and finance ministers argue that "all official bilateral creditors should implement this initiative fully and transparently," and announced that they will hold an extraordinary meeting in November to discuss the details of a 'Common Framework for Debt Treatment Beyond DSSI,' which is also supported by the Paris Club, which represents the world's major official creditors.

"We look forward to the support of the members of the 'Common Framework', still subject to internal approval procedures; to this end, before the G20 leaders' meeting in Riyadh in November, we will hold an extraordinary meeting of governors and finance ministers at which we will publish the 'Common Framework' and discuss outstanding issues related to DSSI," the statement concludes.

The extension of the moratorium on debt payments is one of the main topics under discussion at the IMF Annual Meetings, and has been classified by Finance Minister Vera Daves as crucial for the survival of many African economies, heavily affected by the impact of the fall in the price of raw materials on tax revenues and the slowdown in global demand, in addition to the significant increase in public spending to combat the spread and treatment of covid-19.

On Tuesday, during the 'Governors' Conversation', in which she responded to questions posed by the director of the IMF's African department, Abebe Aemro Selassie, Vera Daves stressed that "all African countries face challenging moments, similar to Angola's, with the economy under a lot of pressure" and added that "we need to look to Africa as a key partner that needs support to survive this moment and face the challenges of development, inclusive growth and social inclusion".

"The fiscal space created by DSSI has been critical to ensure that we survive until now, and we hope it will be extended to 2021, which is why it is so important to talk to the International Monetary Fund (IMF) and ask all members to extend this period of relief, which will be very useful for Angola and the entire African continent," said Vera Daves.

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