The Debt Service Suspension Initiative (DSSI) instituted by the Group of Twenty (G20) has been further extended to the end of 2021.
The extension of the DSSI initiative was agreed on by the G20, the International Monetary Fund (IMF) and the World Bank at the ongoing IMF/World Bank 2021 Spring Meetings.
Welcoming the extension, President of the World Bank Group, David Malpass, noted the World Bank will work closely with the IMF to support the implementation of the DSSI for the extended period.
“I strongly welcome the G20’s decision on Wednesday to extend the DSSI to end-2021. We are working closely with the IMF to support the implementation of the G20 Common Framework, as detailed in this joint paper. I welcome the clear statement in the G20’s communique that “the need for debt treatment, and the restructuring envelope that is required, will be based on an IMF/World Bank Debt Sustainability Analysis” as an input to the creditor committee deliberations,” he averred.
Speaking further at a meeting with the Development Committee of the World Bank at the 2021 Spring Meetings, President Malpass urged participating countries of the DSSI initiative to be transparent with the IMF and World Bank with regards to the financing terms and conditions of loans taken, so as to support the institutions’ efforts to reconcile borrower’s debt data with that of creditors.
“In both these debt efforts, greater transparency and participation are important elements. I urge all of you to disclose the terms of your financing contracts, including reschedulings, and to support the World Bank’s efforts to reconcile borrower’s debt data more fully with that of creditors,” he stated.
The DSSI is a policy that allows bilateral and multilateral creditors, in a limited period, suspend debt service payments for developing and lower-middle-income countries.
It is also to help countries concentrate their resources on fighting the pandemic and safeguarding the lives and livelihoods of millions of the most vulnerable people.
Presently, about 30 Sub-Saharan African nations including Kenya, Ivory Coast and Ethiopia are on the programme giving them some temporary suspension of debt-service payments owed to their official creditors.
The implementation of the DSSI was complemented by a record disbursement of $19 billion from the World Bank’s IDA from April through December 2020, with a significant share provided on grant terms.
Over this period, the World Bank was the biggest provider of positive net flows to DSSI countries.
