Chad: First to Ask for Debt Overhaul Under G20 Common Framework
Chad has become the first country to officially request a debt restructuring under a new common framework “G20 Common Framework” introduced by China and other Group of 20 countries last year with the help of the Paris Club.
What is G20 Common Framework?
G20 Common Framework or “Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI)” was announced in November 2020 to deal with the issue of unsustainable debts faced by various countries as an impact of COVID-19.
- This official request of Chad for debt restructuring under the G20 common framework was notified by the International Monetary Fund (IMF).
- The creditors will now soon begin discussions on the first test of the new framework. The creditors will also ask China and other private-sector creditors to participate as agreed last year.
- A new four-year programme of Chad worth about $560 million under the Extended Credit and Extended Fund facilities was announced by IMF.
- Chad is under high debt like many other African countries.
This is the first time that a country has requested debt restructuring under the framework and the investors will now look at how the framework can work. Participation in China is also a question. Last year, G20 Common Framework brought non-members of the Paris Club- India, China, and Turkey to join the framework.
It is a club or group of officials from major creditor countries. They find sustainable solutions to the difficulties faced by debtor countries in payments. It was established in the year 1956.