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G-24 calls for sustainable debt relief for low-income countries

THE Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development (G-24) is concerned about the high and increasing public debt levels, with many developing countries carrying unsustainable debt burdens.

The Group said this at the ongoing 2023 Annual Meetings of the World Bank Group (WBG) and the International Monetary Fund (IMF) on Tuesday, October 10.

Comprised of 28 members plus China, the G-24 aims to coordinate the position of developing countries on monetary and development issues.

The WBG/IMF event, which started Monday, October 9, will run through Sunday, October 15, in Marrakech, Morocco, and is focused on critical institutional priority topics under the theme of ‘Global Action, Global Impact.’

Expressing its concern, G-24 urged the Bretton Woods Institutions (BWI) to provide a durable debt resolution and a variety of steps to increase financing availability to developing countries.

It also called for reforms of the BWI and international taxation and trade reforms, stating that some of the poorest and most vulnerable countries are excluded from the benefits of debt relief.

Stressing further, it said the global economic landscape is uncertain, with countries affected by declining access, tight external finance conditions, high debt levels and rising inflation.

According to the Group, it is demanding for “allocation of new Special Drawing Rights, the IMF’s reserve currency; reform of IMF short-term financing instruments; increased concessional resources to low-income countries; reform of the IMF’s surcharge policy; increased channelling of SDR from donor countries to needy countries and increase of the Fund’s resource base through its 16th General Review of Quotas.”

It said its recommendations would provide additional financing for members to mitigate shocks and invest in climate action and sustainable development.

The G-24/said a rising trend in protectionist policies, especially from the largest economies, adversely affecting global integration and trade.

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“Developing countries experience unequal distribution of the benefits of trade, limited market access and unfair trade practices, especially in the agriculture sector, which is often the main source of livelihood for the poor,” it stressed.

Calling on the BWI to support reforms of the multilateral trade system, it recommended further pursuit of governance reforms to correct regional underrepresentation in the IMF.

It added that there is a need for more concessional lending, especially for investments in global public goods and sustainable development such as affordable water and energy.




     

     

    Ahead of the annual meeting, which is taking place for the first time in Africa in 50 years, the IMF had said it needed $4.7 billion to close the loan resource gap in Africa.

    The Director-General of IMF, Kristalina Georgieva, said the institution urgently needed to provide $1.6 billion in support to the African continent.

    Recently, The ICIR reported that the IMF said not only has the debt risen and almost doubled in just a decade, but repaying the debt has also become much costlier.

    Nigeria’s public debt burden has risen to N87.38 trillion at the end of the second quarter of this year, according to the Debt Management Office (DMO).

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