Pakistan is Among The Largest Borrowers With $73 Billion External Debt Stock: World Bank

Pakistan is the largest borrower in the list of 15 top Debt Service Suspension Initiative (DSSI) eligible borrowers with an external debt stock of $73 billion at the end of 2018, says the World Bank (WB).

In its latest Debt Report 2020, WB stated that for Pakistan, by far the largest borrower in the DSSI group, with an external debt stock of $73 billion at the end of 2018, 85 percent is owed to official creditors with nearly half accounted for by multilateral creditors.

Pakistan is followed by Angola, Bangladesh, Kenya, Nigeria, Ethiopia, Ghana, Cote d’Ivoire, Myanmar, Tanzania, Senegal, Mozambique, Zambia, Uzbekistan, and Cameroon.

It further stated that bond issuance in international capital markets has also become an important source of financing for some DSSI-eligible countries. Over the past decade (2010-2019) 30 countries in this group issued bonds in the international capital market. The combined issuance totaled $87 billion of which the majority, 85 percent, were issued by sovereign governments and public sector entities.

Issuance by the private sector was confined to 6 countries (Cambodia, Ghana, the Republic of Lao, Nigeria, Mongolia, and Pakistan) with private entities in Nigeria as the most significant issuers. In terms of regional distribution countries in Sub-Saharan Africa were the most active players in international bond markets with a total issuance of $66 billion compared to $21 billion by DSSI-eligible countries in other regions, notably East Asia and the Pacific and South Asia.

Pakistan could save $2.705 billion owed to creditors under the Debt Service Suspension Initiative (DSSI), according to estimates published by the World Bank (WB).

According to the bank’s data the world’s poorest countries could save around $11.54 billion owed to sovereign and other creditors through their participation in the debt-relief program.

The savings under the COVID-19-linked DSSI will be short-term since the initiative only provides for the suspension of debt payments through the end of the year. It postpones those payments until a later date but does not cancel them outright. The DSSI is backed by the G-20, the World Bank, the IMF and the Paris Club of sovereign lenders.

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