IMF seeks speedy debt restructuring process

Managing Director of the International Monetary Fund, Kristalina Georgieva says sovereign debt restructuring discussions are gaining momentum with issues around the comparability of treatment of private and public creditors on the front burner. Responding to a question from CNBC Africa’s Godfrey Mutizwa, Georgieva adds that the G20 Common Framework for debt restructuring duration for countries is now encouraging.

Thu, 12 Oct 2023 14:29:44 GMT

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AI Generated Summary

The IMF pledges $40 billion to support low and middle-income countries and emphasizes the importance of reprioritizing spending and enhancing revenue mobilization in emerging economies.
The G20 Common Framework for debt restructuring discussions gains momentum, addressing issues regarding the treatment of private and public creditors.
Kristalina Georgieva advocates for a swift debt restructuring process and proposes debt cancellation as a potential solution to alleviate the burden on the poorest nations, urging all creditors to collaborate effectively.

Managing Director of the International Monetary Fund, Kristalina Georgieva, recently highlighted the importance of supporting low and middle-income countries facing economic challenges. At the launch of the Global Policy Agenda, Georgieva unveiled plans to provide $40 billion in pledges through the resilience and sustainability trust to address obstacles to growth. She emphasized the need for emerging economies to reprioritize spending and enhance domestic revenue mobilization. The G20 Common Framework for debt restructuring discussions has gained momentum under Georgieva's leadership, focusing on the comparability of treatment between private and public creditors. In an exclusive interview with CNBC Africa, Georgieva addressed concerns about the slow pace of the restructuring process and proposed debt cancellation as a potential solution to alleviate the burden on the world's poorest nations. She called for a relentless pursuit of delivering debt relief to countries in need, emphasizing the critical role of the Common Framework in streamlining negotiations among diverse creditors. Georgieva cited positive progress in reducing the time taken to reach agreements with creditors in countries like Chad, Zambia, Sri Lanka, and Ghana. Despite acknowledging the challenges posed by multiple creditors and varying interests, Georgieva stressed the importance of a case-by-case approach to debt restructuring, facilitated by the IMF and the World Bank. She underscored the necessity for creative solutions to align debt relief efforts with the impact of the climate crisis. Georgieva also highlighted the establishment of the Global Sovereign Debt Roundtable as a significant platform to accelerate debt restructuring by bringing together traditional creditors, new creditors, private sector representatives, and debtor countries. With a focus on transparency and collaboration, Georgieva expressed optimism about the progress made in resolving divisive issues and expediting the restructuring process.