Chad’s creditors are close to reaching a debt relief agreement, which would be the first under a new G20 debt restructuring framework, a French finance ministry source said on Monday.
Alongside Ethiopia and Zambia, Chad is one of the three countries that have so far sought a debt restructuring under a G20 initiative established at the end of 2020.
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Progress has been glacial with some Western G20 members saying that China, the biggest creditor to many African countries, is dragging its feet on reducing countries’ debt burdens.
As host to the Paris Club of mostly rich, Western government creditors, the French finance ministry is deeply involved in the debt-relief discussions under the G20 framework and is co-chair with Saudi Arabia of Chad’s creditor committee.
“We are close to an agreement and being able to communicate about an agreement on Chad which will give some visibility to this country,” the French official said.
Although Chad is currently benefitting from high oil prices, the source added that it was important that both government and private sector creditors be ready to act in case debt servicing conditions become more difficult for the country.
The source said “active” discussions over Zambia were under way, while creditors needed to see progress in talks between Ethiopia and the International Monetary Fund before advancing on their side.
With progress under the G20 initiative proving slow, other countries have been reluctant to follow, although the source said some could be tempted, citing in particular Ghana as an “eligible candidate” following its recent talks with the IMF.