This archive report was first published on 22 June 2020.
According to data from the World Bank, the COVID-19-linked Debt Service Suspension Initiative (DSSI) could save the world's poorest countries up to $12 billion this year, which they owe to sovereign nations and other creditors.
However, the savings under the DSSI will only be short-term, as the initiative provides for debt relief through the end of 2020. It merely postpones payments until a later date, without canceling them outright.
Angola is set to be the biggest beneficiary of the $12 billion G-20 debt relief plan, saving up to $3.4 billion, or approximately 28% of the total estimated by the International Monetary Fund (IMF) and the World Bank.
As of the end of last year, Chinese lenders accounted for 45% of Angola's external debt, totaling $22.4 billion. China alone accounts for $3 billion of the amount Angola owes to the G-20.
Reuters reports that Pakistan would be the second-largest saver among eligible DSSI countries, with $2.4 billion in savings, followed by Kenya with $802 million.
When measured against their respective gross domestic product (GDP), Bhutan would reap the most benefits from the debt relief plan, with 7.3% of GDP savings, followed by Angola at 3.7% and Djibouti at 2.5%.
The DSSI is backed by the G-20, the World Bank, the IMF, and the Paris Club of sovereign lenders.
According to Reuters, the Jubilee Debt Campaign has estimated that the cancellation of poor countries' debt payments, including to private creditors, would free over $25 billion for the countries this year, or $50 billion if extended through 2021.
