Category Archives: Debt relief

Protesters call on banks to ‘drop African debt’ in wake of Covid

Posted on by

World’s poorest nations saddled with ‘imprisoning’ debt, hampering responses to the pandemic, say activists protesting HSBC meeting

Activists at a demonstration outside the annual general meeting of HSBC in London have demanded the bank and other financial giants provide debt relief to African countries hit hard by the coronavirus pandemic.

In an attempt to highlight the role of private creditors in the debt crises of the world’s poorest countries, campaigners with “drop the debt” banners gathered outside HSBC’s AGM at the Southbank Centre.

Continue reading...

Four-fifths of Sudan’s £861m debt to UK is interest

Posted on by

Freedom of information data will increase calls for country to be granted debt amnesty

When Dominic Raab, the foreign secretary, was in Sudan in January he offered £40m in aid to help its poorest people, who are facing unprecedented food scarcity in a debt-laden country where austerity is deepening.

Sudan, ruled by an unelected military-led transitional government after longtime ruler Omar al-Bashir was deposed in 2019, owes the UK almost £900m. But the Observer can reveal that almost 80% of that was accrued from interest, leading to calls for an unconditional debt amnesty.

Continue reading...

The number of people in need is frightening – we need a global response | Axel van Trotsenburg

Posted on by

We can rise to the challenge of a green, resilient and inclusive recovery from Covid, but only if critical changes are made

The numbers are well-publicised but bear repeating. Around 120 million more people were pushed into extreme poverty in 2020, a number that could rise to 150 million in 2021. An estimated 250 million jobs have been lost around the world, and the number of people affected by acute food insecurity was estimated to have doubled to 272 million by the end of last year. A decade of progress in the most fragile countries wiped out.

Let’s put a human dimension on these numbers. More than a billion children have been out of school during the Covid-19 pandemic, and girls are much less likely to return to the classroom.

Continue reading...

UK must cancel poor countries’ debt or face Covid-19 ‘financial tsunami’

Posted on by

International development committee tells government that pandemic and foreign aid cuts fuelling poverty and food insecurity

Billions of dollars of debt owed by poor countries must be permanently cancelled in order to stave off a “looming financial tsunami” caused by Covid-19 and the ensuing global recession, a cross-party committee of MPs has warned.

Debt relief will not be enough to help the world’s most vulnerable economies as they face skyrocketing levels of hunger and unemployment, according to an inquiry into Covid-19’s secondary impacts in developing countries, published on Tuesday by the House of Commons international development committee (IDC).

Continue reading...

Zambia’s default fuels fears of African ‘debt tsunami’ as Covid impact bites

Posted on by

Aid agencies say debts should be restructured or cancelled due to the pandemic and warn other countries could follow

Zambia has become the first African country to default on its debts since the pandemic, leading to fears that a “debt tsunami” could engulf the continent’s most heavily indebted nations as the financial impact of coronavirus hits.

A hastily-arranged G20 finance minister meeting in Saudi Arabia failed to sort out Zambia’s debt, after the southern African country missed a $42.5m (£32m) coupon payment on its bonds in October. Missing another payment on 14 November meant a technical default.

Continue reading...

‘People are suffering’: G20 to call on private lenders to suspend debt repayments

Posted on by

At this weekend’s meeting in Riyadh, leaders will urge action to free up resources to help stricken developing countries combat Covid-19

From his house in Nairobi, banker turned financial vlogger James Mumo contemplated the state of Kenya’s post-pandemic economy. “It’s hopeless for a normal businessperson just trying to make a living for their family,” he says.

The economic crisis caused by the pandemic and ensuing lockdowns has left many struggling: 1.7 million Kenyans lost their jobs between April and June 2020, while 20.8 million borrowed funds using a programme provided by popular mobile carrier Safaricom, double last year’s number. One financial services conglomerate headquartered in Nairobi bought a yard to store all the cars it had repossessed after customers couldn’t repay their loans.

Continue reading...

Creditors must wake up fast to threat of emerging market debt crisis

Posted on by

Zambia could become the first country to default on its debts amid the fallout from Covid-19, but it won’t be the last

Zambia is running out of money to pay its debts. It has asked bondholders for breathing space so that it can put a restructuring plan in place. The copper-rich African state is at risk of being the first country to default on its debts since the start of the coronavirus pandemic.

Not the last though. Zambia is the canary in the coalmine, a harbinger of a full-blown crisis that has been lurking in the background from the moment the seriousness of Covid-19 became apparent.

Continue reading...

Debt in developing countries has doubled in less than a decade

Posted on by

Jubilee Debt Campaign reveals sharp rise in number of countries in distress since 2018

Developing nation debt has more than doubled in the past decade and left more than 50 countries facing a repayment crisis, according to a campaign group.

Data from the Jubilee Debt Campaign shows that even without taking full account of the impact of the coronavirus pandemic, there has been a sharp jump in the number of poor countries in debt distress since 2018.

Continue reading...

Calls for debt relief to help world’s poorest nations fight coronavirus

Posted on by

Australia urged to use its influence to push for the permanent cancellation of all debt due from vulnerable countries in 2020

Low-income countries need their debts for 2020 forgiven, alongside billions in emergency grants to survive the Covid-19 crisis, civil society groups around the world have said, arguing the viral pandemic will hit hardest the poorest people in the poorest countries.

More than 100 civil society organisations internationally have called on creditor nations to permanently cancel all debt repayments as the “fastest way to keep money in countries and free up resources to tackle the urgent health, social and economic crises resulting from the Covid-19 global pandemic”.

Continue reading...

Coronavirus crisis demands that the G20 give debt relief to sub-Saharan Africa

Posted on by
With the IMF and World Bank spring conference approaching, research underlines need to bail out world’s poorest countries

For more than two years the World Bank and the International Monetary Fund have warned that sub-Saharan Africa stands on the verge of a debt crisis. Ever since commodity prices began to fall in 2015, the public finances of nations stretching from Nigeria to Kenya and Chad to South Africa have deteriorated.

If China is the manufacturing centre of the world, Africa is its chief supplier of essential materials, from oil and copper to the rare-earth minerals used in mobile phones. As China’s manufacturing waned in the middle of the last decade, so did the crucial foreign earnings that keep African nations afloat.

Continue reading...

Debt relief allows Somalia to rejoin global economy after 30-year exile

Posted on by

IMF and World Bank sign off $5bn in assistance with help of bridge financing from Norway, Italy, the UK and the EU

Somalia’s debt will be slashed to a fraction of its current levels after almost $5bn (£4.1bn) of assistance was approved by the International Monetary Fund and World Bank.

A joint statement from the global financial institutions praised Somalia’s efforts at economic reform, allowing it to qualify for a debt relief programme and reintegrate into the global economy after 30 years.

Continue reading...

Africa leads calls for debt relief in face of coronavirus crisis

Posted on by

IMF and World Bank lend their support in bid to help poorest countries strengthen their health systems

Government ministers across Africa have called for the suspension of debt interest payments as the Covid-19 crisis deepens.

The numbers of cases being reported in Africa are still behind Europe and the US but rises are being confirmed in South Africa, Kenya, Egypt, Algeria and Burkina Faso, among others, and there is fear of what economic consequences the pandemic might wreak.

Continue reading...

Urgent call to head off new debt crisis in developing world

Posted on by

Covid-19 crisis is raising borrowing costs for poorer nations just as commodity exports, tourism and remittances sent home fall

Rapid action is needed to head off the risk of a new debt crisis in the world’s poorest countries amid evidence that the Covid-19 pandemic is raising borrowing costs and hitting commodity exports, according to a leading campaign group.

A Jubilee Debt Campaign report said some of the world’s most vulnerable nations were being hit by a double whammy of increasing debt interest bills and the tumbling price of oil and other raw materials.

Continue reading...

Ballooning debt forces poor countries to cut public spending

Posted on by

Congo-Brazzaville and Chad among hardest hit as campaigners warn spiralling repayments could trigger disaster

Poorer countries are cutting public spending in response to a “growing debt crisis”, campaigners have warned.

Debt in some countries has trebled according to new figures that calculate debt reimbursements, and their impact on government expenditure, in 60 countries.

Continue reading...

IMF accused of ‘reckless lending’ to debt-troubled states

Posted on by

Jubilee Debt Campaign says the Fund broke its own rules by not ensuring sustainable debt burden

Debt campaigners have accused the International Monetary Fund of encouraging reckless lending by extending $93bn (£75bn) of loans to 18 financially troubled countries without a debt restructuring programme first.

In advance of the IMF’s annual meeting in Washington next week, the Jubilee Debt Campaign (JDC) said the the Fund was breaking its own rules by providing financial support without ensuring that the debt burden was sustainable.

Continue reading...

Billionaire pledges to pay student debt for 2019 class at historic black US college

Posted on by

Robert Smith makes pledge to eliminate students’ debt estimated at $40m at Morehouse, Martin Luther King’s alma mater

Delivering the commencement address at Morehouse College in Atlanta, the alma mater of Martin Luther King Jr, the billionaire technology investor and philanthropist Robert F Smith made a surprise announcement: his family would wipe out the student debt of the entire class of 2019.

Related: $1.5tn in debt: student loan crisis shatters a generation's American dream

Continue reading...

Czech democracy ‘under threat’ from rising debt crisis

Posted on by
MPs to vote on new law to ease punitive collection system

Snowed under with debts from a failed business, Renata’s hands shook as she told a tale of financial misery that drove her to contemplate suicide and visited fear on her ageing parents.

“I was so scared of the debt collectors because they were coming to my parents’ house,” she said, depicting a nightmare scenario as hungry creditors closed in. “If you are a debtor here, the state criminalises you, worse than if you’re a real criminal. Even a murderer can be released early with good behaviour. I didn’t kill anyone or hurt anyone, I didn’t want my business to collapse – but I will not be free until the end of my life.”

Continue reading...