“One could argue there are four or five countries there that are certainly at risk of falling into that debt trap,” Antonio Pedro, the executive secretary of the UN Economic Commission for Africa, said in an interview by phone from Addis Ababa, Ethiopia’s capital. He declined to identify them.
Chad became the first nation to clinch a deal to restructure its debts under the Common Framework in 2021. Ethiopia and Zambia are in the process of negotiating agreements, while Ghana announced earlier this month that it intended seeking relief under the plan. The G-20 mechanism, which brings the Paris Club of traditional rich debtor countries together with China to try to restructure the debts of low-income countries on a case-by-case basis, has drawn criticism on the grounds that it is slow and cumbersome to implement.African authorities are proposing several reforms to improve the framework, according to Pedro.
Pedro also backed calls for the reallocation of the IMF’s so-called special drawing rights, reserve assets that work like an overdraft and come with no conditions, from wealthy nations to poorer ones. The African Development Bank has lobbied rich nations to use their rights to the SDRs to help raise funding to support poorer countries.
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