ABIDJAN (Reuters) – Ivory Coast has asked to join an initiative that would let it suspend its debt payments until the end of the year in order to spend more on health services and tackling the fallout of the coronavirus pandemic.
The amount of debt service eligible for suspension is 119 billion CFA ($205.45 million), according to a letter sent by the government to its main state creditors dated June 15.
The request is under the Group of 20 major economies’ Debt Service Suspension Initiative (DSSI) to help 77 low-income countries, backed by the Paris Club of sovereign lenders.
“Ivory Coast has decided to request participation in the DSSI initiative and, as such, has sent official requests to its main creditors in the official bilateral sector, as well as to the Paris Club,” the government said.
It explicitly ruled out requesting any debt holiday from private lenders – something that the Paris Club has previously asked debtor countries to do.
A number of the low-income countries had expressed concerns that to do so could hurt their credit ratings after ratings agencies said a failure to pay private creditors who had agreed to suspend debt payments in parallel with the Club could be considered a default.
“Ivory Coast … hereby reaffirms its capacity and commitment to honour all of its contractual obligations vis-Ã -vis its private creditors in the servicing of its external public debt,” the statement added.
It said macroeconomic fundamentals in the world’s top cocoa producer remained excellent, with an economic growth projection of 3.6% in 2020, and a national debt equivalent to 38.6% of gross domestic product (GDP) at the end of 2019.
The International Monetary Fund expects Ivory Coast’s economy to grow 8.7% in 2021, the highest projected rate on the entire continent, the government said. ($1 = 579.2200 CFA francs)
(Reporting by Ange Aboa; writing by Bate Felix; Editing by Kevin Liffey)