Chad and several other countries are already in deep debt distress and more will join their ranks this year, given the severity of the global recession triggered by the COVID-19 pandemic, World Bank Group President David Malpass said.
The African oil producer Chad may need a deep reduction in the net present value of its debt, and creditors would need to work with the country to find a viable solution to its debt overhang.
He said, “For some countries, it’s a red alert. We need to find ways to adjust the debt burden, so that the burden of debt on people in poorer countries can be reduced dramatically.”
He added Zambia had already defaulted on some of its debts and restructurings were underway in Angola and Ecuador but declined to name other countries facing acute problems. He said the World Bank and the International Monetary Fund were currently assessing the debt sustainability of countries facing problems.