The People’s Republic of China and G-20 countries have agreed to give debt relief to the poorest countries in the world which are classified as IDA countries by the World Bank.
The World Bank President, David Malpass, made this known on Friday at the ongoing virtual April 2020, virtual Spring meetings of the World Bank and International Monetary Fund.
According to him, “I take note that in the G-20 meetings, China is supporting the international agreement to allowing moratorium of debt repayments by IDA countries if they ask for forbearance.
“IDA countries will have bilateral debt relief beginning May 1. That way, they can concentrate their resources on fighting the pandemic and its economic and social consequences.”
However, IDA countries are those with per capital income below an established threshold. The 2020 threshold is $1,175.
Countries, such as Nigeria and Pakistan, are IDA-eligible based on per capita income levels and are also creditworthy for some IBRD borrowing. They are referred to as ‘blend’ countries.
Meanwhile, the International Development Association (IDA) is an international financial institution which offers concessional loans and grants to the world’s poorest developing countries.
