US Treasury Secretary to urge for ‘speedy’ action on Ghana, Zambia debt relief within G20 framework

US Treasury Secretary Janet Yellen will push this week for urgent resolution of requests by Ghana and Zambia for restructuring of their sovereign debts, as a record number of developing nations are at risk of a debt crisis, with ballooning inflation escalating borrowing costs.

Yellen, who is scheduled to meet with her counterparts at this week’s World Bank and International Monetary Fund (IMF) Spring meetings, is also pushing for concrete steps to speed up and make the overall debt relief process more predictable, according to US Treasury Undersecretary Jay Shambaugh.

Ghana and Zambia have already defaulted on their foreign debt and are negotiating debt restructuring with creditors. The G20 countries have been criticized for failing to provide immediate debt relief through its common framework established to assist low-income countries at a time when 60% of them are in or near economic crisis.

“At a broad level, we’re really just pushing to improve the speed and predictability of this framework,” Shambaugh has said and added that the Treasury’s immediate priority is to resolve pending requests from Zambia, Ghana, and Ethiopia under the G20 framework. Shambaugh also said Washington was pushing for “consolidated action” on Zambia’s debt treatment and creating a creditor committee for Ghana within the next month, and that the world’s two greatest economies, the United States and China, needed to work together on these issues. According to the Treasury, Yellen will discuss the debt issue in separate meetings with officials from the G20 and the Global Sovereign Debt Roundtable, which comprises creditor countries.