African countries experiencing public health disasters will now, and in future, benefit from a new initiative established by the International Monetary Fund (IMF). The Catastrophe Containment and Relief (CCR) Trust allows IMF to provide debt relief in situations such as the Ebola outbreak in some West African countries as well as to other nations on the continent experiencing different types of catastrophic disasters. The initiative was officially announced on Friday this week but the decision behind it was reached following a meeting on February 4 by the IMF Executive Board of directors which discussed how to better support low income countries hit by health disasters. It’s also the Fund’s response to a November 2014 meeting of the G-20 nations in Brisbane which called on the Bretton Woods Institutions to boost support to countries severely affected by the Ebola. The meeting suggested a cocktail of support such as concessional loans, debt relief and grants, and asked other international bodies to explore new, flexible mechanisms to address the economic effects of future crises.It’s not clear how much money the IMF is setting aside for this initiative, but the first beneficiaries, Ebola hit countries in West Africa, know how much they’ll get. For instance, the CCR will provide grants for debt relief of $100 million for the three countries affected by Ebola—Liberia, Sierra Leone, and Guinea. The debt relief to the three countries comes in addition to the $130 million of assistance provided in September 2014, and a second round of new concessional loans amounting to about $160 million will be considered soon by the Executive Board. Experts say that the grants can ease pressures on the affected countries’ balance of payment and create fiscal space to tackle relief and recovery challenges. Expanded support This IMF new initiative replaces the Post-Catastrophe Debt Relief (PCDR) Trust which was established on June 25, 2010 following the massive earthquake in Haiti; CCR expands the circumstances under which the Fund can provide exceptional assistance to include public health disasters. “I welcome the establishment of the Catastrophe Containment Relief Trust. It aims at enhancing our support to the countries in Africa hit by Ebola, as well as other low income countries that may be affected by public health disasters in the future,” said IMF boss, Christine Lagarde. The scope of the Trust is wide and not limited to only countries currently battling Ebola. Lagarde said CCR is designed to allow the IMF flexibility needed to adjust its policies in the face of unexpected international developments, including pandemics, to serve the needs of its most vulnerable members. In August 2014, the World Bank announced that it was allocating $200m in emergency assistance to West African countries battling to contain the Ebola outbreak. The money, it was reported would be distributed to the governments of Liberia, Sierra Leone and Guinea as well as to the World Health Organization. It’s fair to say that CCR is a fruit of a meeting in October last year in Washington, where leaders of the three Ebola-stricken West African nations met the heads of the United Nations, the IMF and the World Bank to discuss what help they need to fight Ebola. During the meeting, Sierra Leone President Ernest Bai Koroma asked for support saying, “Sierra Leone needs help from people at this table. This is not a disease we brought in ourselves.” Koroma described Ebola as an ‘evil virus’ which was causing great destruction to mining, agriculture, state security and poverty reduction initiatives and called for concerted efforts to combat it. African Development Bank Group President Donald Kaberuka who also attended the Washington strategy meeting said then, that, “We can deal with it. We can resolve this matter and the African Development Bank will play its part.” Kaberuka, a Rwandan economist and former Minister of Finance, emphasized the need to address the economic impact to affected countries saying: “We must provide macro-economic support” as we “deal with the epidemic to stop Ebola spreading to other regions”. The AfDB has contributed more than $200 million towards efforts to contain Ebola but Kaberuka cautioned that a balance had to be struck in order not to, “take money from education, infrastructure and other resources. I know it is tough.” Since the deadly outbreak in West Africa, 1,995 people have died in Guinea, 3,826 in Liberia and 3,341 in Sierra Leon. The East African community is jointly contributing 41 doctors and 578 other healthcare workers to help Ebola stricken countries. Rwanda has pledged seven doctors and seven other healthcare workers, Kenya 15 doctors and 300 other healthcare workers, while Uganda will contribute 14 doctors and 21 other healthcare workers. Tanzania pledged five doctors while Burundi will contribute 250 healthcare workers.
