Cancel the Debt
The coronavirus pandemic is the worst global health crisis in a century. Yet many countries are being forced to choose between spending money on healthcare or on continuing to pay their debts.
Unless urgent action is taken, countries will be plunged into a new debt crisis as they respond to the threat of the virus while managing spiralling debt payments.
Why are we targeting private banks?
We are calling on banks and speculators to cancel debts as it is not right that in the middle of a pandemic countries have to choose between saving lives and repaying debts. While some government lenders have suspended some debt, private lenders have so far not cancelled any of the debt owed to them.
We know that BlackRock, HSBC, JP Morgan and UBS own significant amounts of debt, but there is no definitive list of who all the debt is owed to. We have written to each of the companies listed asking for details of how much debt they own of countries eligible for the G20 debt initiatives, but none of them have been willing to answer this question.
Which countries need debt relief?
All low- and middle-income countries that need it must have their debts cancelled. Even before Covid-19 hit there was a growing debt crisis. Of the 70 countries the IMF assesses for debt risk, 34 were already in debt default or at high risk of being so at the start of 2020, up from 17 in 2013.
In 2020, 59% of all debt payments due in Zambia were owed to private creditors, while the share was 59% in Ghana, 55% in Nigeria and 45% in Senegal.
What is the UK government’s role?
The UK has a crucial opportunity to show global leadership on debt this year as it holds the presidency of the G7, a grouping of some of the most powerful countries in the world.
The G7 contains all the countries with legal control of private lenders, so there is an opportunity for UK leadership to create an agreement that legally ensures private lenders take part in debt relief and restructuring.
Who else is involved in the campaign to cancel the debt?
CAFOD is one of over 250 organisations around the world who are calling for action to be taken on debt in the face of the coronavirus crisis.
In the UK, Jubilee Debt Campaign, Christian Aid, Global Justice Now and CAFOD are working together on this campaign.