56 Poor Countries Got $30bn Zero-Interest Loans in Four Years – IMF
The International Monetary Fund said 56 countries have benefitted from zero-interest lending to the tune of $30 billion through the Poverty Reduction and Growth Trust (PRGT) since the start of the COVID-19 pandemic.
The Managing Director of the IMF, Kristalina Georgieva, announced on Saturday that the fundraising targets for the PRGT agreed to in July 2021 had been successfully met.
“Reaching these targets is critical to allow the IMF to continue to support low-income countries with zero-interest rate financing to meet their evolving needs,” she said in a statement at the IMF/World Bank Annual Meetings in Marrakech, Morocco:
She said low-income countries have been hit hard by multiple global shocks in recent years.
She said, “Not only are they bearing the brunt of economic scarring from the pandemic, these countries are also grappling with food price shocks, high debt, and the increasing occurrence of climate disasters. Throughout these challenges, the IMF has been a strong partner for low-income countries.
“Since the onset of the pandemic, zero-interest lending through the PRGT has increased fivefold – to about US$30 billion – benefiting 56 countries. Currently, 30 countries (almost 45 percent of all PRGT-eligible countries) have an ongoing PRGT-supported program, the largest share since the inception of the PRGT in 2009.”
The demand for PRGT support is projected to reach nearly US$40 billion during 2020-24, about five times the historical average, according to the IMF.
Georgieva announced the achievement in Marrakech of the fundraising goal of $3 billion for PRGT subsidy resources, which ensures that PRGT financing can continue to be provided at zero-interest rate.
She said, “I would like to thank the membership for their generosity in helping us achieve this important milestone and for their unwavering commitment to support our most vulnerable members.
“What is even more remarkable about today’s milestone is that more than 40 contributors have delivered for these urgently needed subsidy resources – one-third of them from emerging market economies, including from here in Africa. Even countries that had previously benefited from IMF support are now stepping up and giving back in a remarkable show of solidarity.”
She said keeping the PRGT adequately resourced will require continued efforts.
The IMF boss said, “The strong demand for concessional financing combined with sharply higher interest rates will continue to increase the need for PRGT subsidy resources. The IMF is committed to making sure that the PRGT continues to provide strong support to low-income countries.
“Having completed this important stage of fundraising, we will now embark on a comprehensive Review of the Fund’s Concessional Facilities and Financing to ensure that the long-term financing capacity of the PRGT is placed on a sustainable footing.”
