David Malpass, President of the World Bank Group, has expressed disappointment over Ghana and Nigeria’s refusal to join the Debt Service Suspension Initiative (DSSI).
The DSSI was established in May 2020 and will expire at the end of December 2021.
The DSSI, developed by the International Monetary Fund (IMF) and World Bank, provided countries with the opportunity to freeze debt servicing while focusing on other commitments.
Mr. Malpass was responding to questions during a program in Washington DC about allegations that the Bretton Woods institutions are not doing enough to help African countries in debt cancel their debts.
In response to the question, he stated that Ghana and Nigeria did not apply for the DSSI, which would have provided some financial space for loan repayment.
“Kristalina (IMF Boss) and I were talking yesterday with the Group about the Common Framework. If countries could have a situation where the common framework clause allow the country to have a standstill on debt, that would help the country choose their path forward on debts restructuring. That would mean they would get a break on debt repayment while they work on debt restructuring,” he explained.
According to Mr. Malpass, such initiatives are intended to help developing countries mitigate the effects of economic hardship.
He did, however, point out that some developing countries refused to take advantage of the initiative to help their citizens cope with the current global hardship.
“Nigeria and Ghana both, did not ask for the common framework treatment”, he said, adding that the situation has made it difficult for such countries to overcome the negative impact of current global economic hardship on trade and currencies of developing countries
