Creditors say Chad doesn’t need debt relief now given soaring oil prices

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WASHINGTON — Chad’s creditors said Thursday they agreed the African country does not need debt relief at this time given soaring oil prices, but pledged to meet in again if a funding gap is identified.

In a statement released by the Paris Club of Official Creditors, Chad’s creditors said they were finalizing a memorandum of understanding on a deal, which marks the end of a debt treatment framework agreed by the Group. of the 20 major economies and the Paris Club at the end of 2020. .

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Along with Ethiopia and Zambia, Chad was one of the first three countries to seek debt restructuring under a G20 initiative, but progress has been glacial.

The deal, first reported by Reuters, makes it clear that Chad’s bilateral creditors – China, France, India and Saudi Arabia – would act to provide Chad with much-needed debt relief, it said. a source familiar with the matter told Reuters.

The deal also includes Swiss-based mining and commodities company Glencore, a major creditor, which was seen as a « huge step », the source said.

Although Chad is currently benefiting from high oil prices, economists and experts say government and private sector creditors must be ready to act in case debt service conditions become more difficult for the country.

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This could happen in 2024, the source said, when Chad will face a high level of debt service payments.

Chad’s creditors’ committee, co-chaired by France and Saudi Arabia, met virtually on September 13 and 27, with members of the International Monetary Fund and the World Bank.

No debt relief from official bilateral creditors is currently needed given the surge in oil prices since the approval of an IMF loan program on Dec. 10, the committee said. However, it agreed to meet again if necessary.

« The creditors’ committee is committed to meeting again and addressing the need for debt treatment if a financing gap is identified, » he said, adding that Chadian authorities should seek comparable debt treatments from all bilateral private and official creditors if necessary. .

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He also urged Glencore, Chad’s largest private external creditor, « to reaffirm its commitment to provide debt treatment during the IMF program should a financing gap be identified » and to address remaining debt vulnerabilities resulting of its accelerated reimbursement mechanism.

A Glencore spokesman declined to comment.

Chad’s finance minister welcomed cooperation with the G20, Paris Club and IMF during a meeting of African finance ministers and Group of Seven officials on Wednesday, the source said.

The source said talks were continuing with Zambia, whose finance minister also attended the G7 meeting with African finance ministers, an event coordinated by the current G7 chair, Germany. (Reporting by Jorgelina do Rosario and Andrea Shalal; Additional reporting by Rachel Savage in Johannesburg; Editing by Paul Simao and Deepa Babington)