The World Bank will be meeting with officials of credit rating agencies to discuss possibilities of firms holding on with ratings of countries that are seeking financial help from Bretton Woods Institutions, following the outbreak of the coronavirus pandemic.
The Country Director of the World Bank, Pierre Frank Laporte, told Alfred Ocansey on the Sunrise morning show on 3FM 92.7 last Thursday that Finance Ministers in Africa have raised concerns to the effect that these rating agencies are likely to put them on their assessment board for taking advantage of the provisions made by the World Bank and other institutions including the International Monetary Fund (IMF) to support their economies in the midst of the pandemic.
In March this year, African finance ministers called for a $100 billion stimulus package aside a request for the suspension of debt service payments.
They held a virtual conference to discuss how to deal with the social and economic impacts of the pandemic on African nations.
This was to help the continent combat the impact of the coronavirus on the economy.
Accordingly, the World Bank, the IMF, thr African Development Bank (AfDB) and other regional institutions allowed the countries to tap into existing facilities.
Some $44 billion would come from not servicing debt.
Mr Laporte said, “When you don’t pay your debt, in the future the banks will know that this guy doesn’t pay debts. What is happening is that one credit rating agency has already put a couple of countries under review by the fact that they applied for the debt services suspension.
“Some countries are saying if I am going to apply for this initiative, it will benefit me. But on the other hand, if I am going to be put under watch then I will have to think twice.
“This is something that internally we are working on. The bank is consulting with the credit rating agencies.
“For instance, Ethiopia was put under watch by a specific credit rating agency and this is causing a lot of uneasy for the finance ministers in Africa.”
He further said the global finance firm will undertake an assessment of the Covid-19 situation in December to ascertain whether or not the pandemic is declining before a decision is taken to extend the debt suspension for countries.