IMF Delivers New Financing to Help Poorest Countries Deal with Downturn

Washington, D.C. — The International Monetary Fund has delivered a significantly improved financing package for the least developed countries, ONE said today. The package includes zero interest rate loans through 2011. It also provides lending capacity of $17 billion through 2014.

In response, ONE supporter Bob Geldof said today,

“Until recently, trillions had been found for fiscal stimulus packages for the rich world but nothing much for the bottom billion. Dominic Strauss Kahn’s radical leadership at the IMF has delivered a major breakthrough for the poorest countries being battered by an economic crisis not of their making. Great credit goes also to Barney Frank and the U.S. Treasury for their strenuous work in driving this deal forward.”

ONE remains hopeful that the Fund is exploring options for grants or debt relief.

In April, ONE joined other organizations to ask the IMF to build upon successes of the G20 Summit in London and provide African countries with the resources they need to get through the financial crisis in a way that does not create unsustainable levels of debt. ONE called on the IMF to direct more of their own resources and more of the anticipated profits from an impending sale of gold reserves to finance these efforts.

This week, the IMF has met requests to increase low-interest resources. Critically, the Fund also announced that all loans through 2011 will have no interest rate charges. Interest rates after 2011 will also be reduced.

The fallout from the financial crisis continues to impair developing countries in sub-Saharan Africa. The World Bank estimates that as many as 50 million people risk being pushed into extreme poverty in 2009.