Cancel the Debt

The coronavirus pandemic has been the worst global health crisis in a century. Yet many countries are being forced to choose between spending money on public services such as healthcare and education 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 devastation caused by the pandemic while managing spiralling debt payments.

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What are we asking private creditors to do?

We need private creditors to:

  1. Cancel the debts for low- and middle-income countries that request it to help them respond and recover from the pandemic.
  2. Play a full part in international processes including the G20’s Common Framework, granting requests for debt relief through this process.
  3. If countries can’t pay, don’t force them to by taking them to court.

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 private lenders such as 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.

In April 2022, Zambia will go head-to-head with BlackRock as it seeks to negotiate a cancellation of its debt. Help us stand in solidarity with campaigners in Zambia and urge BlackRock to cancel the debt.

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Cancel the Debt

Covid-19 could push up to 150 million people into extreme poverty.

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 per cent of all debt payments due in Zambia were owed to private creditors, while the share was 59 per cent in Ghana, 55 per cent in Nigeria and 45 per cent in Senegal.

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How much debt do private creditors hold?

Private creditors’ share of the foreign debts of low-and lower-middle income governments increased from 25% in 2010 to 47% in 2018. For some countries, the majority of their debts are to private creditors.

In 2021, the 73 countries eligible for the G20 debt suspension initiative are due to pay $52.7 billion in debt payments, 30% of which is to private lenders.

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.

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