The World Bank urged private creditors and the world's poorest nations to accelerate debt relief talks to help mobilize resources to fight the coronavirus pandemic.
The Group of 20 largest economies agreed in April to suspend about $20 billion in debt servicing payments for 73 nations, more than half of them in Africa. The group has called on private creditors to do the same, but efforts have been delayed by legal hurdles and the risk of triggering default.
African governments, who are negotiating the relief with a creditor committee, have agreed to stay current on obligations until an agreement is reached.
“I've been somewhat frustrated by the slow pace,” World Bank President David Malpass said on a conference call with reporters on Tuesday. “Commercial creditors are still by and large taking payments from even the poorest countries, and there needs to be faster movement toward commercial creditors meeting the goals of the G-20 announcement.”
Several low-income countries have said they fear calling for help would hurt future access to capital markets. But Malpass said those nations may be underestimating the impact of the pandemic on their finances.
“Given that there's a deep recession underway, it's likely that the credit ratings for some of the countries will be downgraded as part of the global depression,” Malpass said.
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