Somalilandsun: The Paris Club of creditor nations have agreed to suspend debt service payments from Ethiopia, Chad, Pakistan and Congo as part of a G20 debt relief deal, the group said.
The Group of 20 leading economies and the Paris Club, an informal group of state creditors coordinated by the French finance ministry, agreed in April to freeze debt payments of the 77 poorest countries this year to free up cash to fight the coronavirus pandemic.
The latest agreements bring to 12 the number of countries to receive debt relief under the deal with a total of 1.1 billion USD in debt deferred as a result, the Paris Club said, adding that 30 countries had requested to benefit, according to Reuters.
The Paris Club is an informal group of official creditors whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by debtor countries. As debtor countries undertake reforms to stabilize and restore their macroeconomic and financial situation, Paris Club creditors provide an appropriate debt treatment. Paris Club creditors provide debt treatments to debtor countries in the form of rescheduling, which is debt relief by postponement or, in the case of concessional rescheduling, reduction in debt service obligations during a defined period (flow treatment) or as of a set date (stock treatment).
The origin of the Paris Club dates back to 1956 when Argentina agreed to meet its public creditors in Paris. Since then, the Paris Club has reached 434 agreements with 90 different debtor countries. Since 1956, the debt treated in the framework of Paris Club agreements amounts to $ 586 billion.