WASHINGTON – The United States on Tuesday proposed that the International Monetary Fund write off some $100 million in debt it is owed by Guinea, Liberia and Sierra Leone to free up more resources for those countries, the hardest hit by the Ebola outbreak.
The debt relief should enable the three impoverished West African countries to spend more on government services and to support their economies as they cope with the devastating epidemic, U.S. Treasury officials told Reuters.
The countries now owe the IMF a combined $372 million, of which $55 million comes due over the next two years, officials said on condition of anonymity.
“The International Monetary Fund has already played a critical role as a first responder, providing economic support to countries hardest hit by Ebola,” U.S. Treasury Secretary Jack Lew said in a statement issued to Reuters. “Today we are asking the IMF to expand that support by providing debt relief for Sierra Leone, Liberia, and Guinea.”
The U.S. proposal must still be approved by the IMF’s other 187 member countries. Lew will recommend the move to the Group of 20 leading economies at their meeting in Brisbane, Australia this week.
The United States proposed that the money for the $100 million in IMF debt relief should come from a special trust fund set up for poor countries coping with catastrophic natural disasters, which now contains about $150 million of the IMF’s own resources.
The so-called Post-Catastrophe Debt Relief Trust was first used for Haiti in the aftermath of its 2010 earthquake.
In September, the IMF approved $130 million in aid to the three countries to help them deal with the economic impact from the Ebola virus, which has sapped their growth, cut into tax revenues and affected exports and other industries.
The IMF estimated last month that the three countries faced financing gaps of about $300 million this year and could also face large financing needs in 2015 as their economic situation deteriorates.
Liberia, Sierra Leone and Guinea are among West Africa’s poorest countries and the hardest hit by the worst Ebola epidemic since the disease was identified in 1976. The virus has killed at least 4,950 people out of about 13,240 cases this year, according to the World Health Organization.