European Council approves debt relief efforts for African countries

The European Council on Tuesday approved a set of conclusions in response to a call for debt relief for African countries.
According to a press statement, made available to PANA, the conclusions highlight the increasing debt vulnerability in low-income countries, particularly in Africa, and underscore the European Union’s support for a coordinated international approach on debt relief efforts for African countries.

The Council welcomed the G20 – Paris Club Debt Service Suspension Initiative (DSSI), which offers a temporary debt moratorium to the poorest countries to help them manage the severe impact of the COVID-19 pandemic, and its extension until 30 June 2021 with the possibility of a further extension by six months.

It commits to a full and transparent implementation of this initiative.

The Council also recognises that for countries with unsustainable debt levels, further debt relief may be required.

It welcomes the G20 agreement on a ‘Common Framework for Debt Treatments beyond the DSSI’ as a major step forward in the sovereign debt restructuring international architecture.

“In this context, it advocates the negotiation of debt restructuring where necessary, on a case-by-case basis, while ensuring strong conditionality on public financial management, anti-corruption frameworks and domestic resource mobilisation in the context of an International Monetary Fund (IMF) programme,” the statement said.

In addition, the Council stressed that debt transparency is critical for a sound assessment of debt sustainability, debtor government accountability, and to enable informed decisions for borrowers and creditors in the context of debt relief efforts.

“It takes the view that all public debt data should therefore be disclosed and supports international efforts aimed at strengthening debt transparency in low-income countries,” the statement concluded.

(PANA/NAN)