G20 debt suspension request: 90% of bonds governed by English law

  • First payments due on 1 and 4 May on debts G20 has asked private creditors to suspend
  • Jubilee Debt Campaign estimates $9.4 billion of debt payments are due to private creditors in the remainder of 2020 for 77 countries covered by G20 deal

New figures released today by Jubilee Debt Campaign show that 90% of bonds the G20 has called for a debt suspension on are governed by English law. The campaigners are calling for UK legislation to be passed to protect any countries from being sued if they do implement the suspension requested by the G20.

On 15 April the G20 agreed a suspension of debt payments to other governments from May to December 2020 for 77 of the poorest countries in the world, due to the Covid-19 crisis. The G20 also called upon private creditors to participate on similar terms, but they are not obliged to.

Jubilee Debt Campaign has calculated that $4.3 billion of foreign currency bond payments are due from May to December 2020 for the 77 countries, most of which is interest. In addition, they estimate a further $5.1 billion is due to be paid in less-transparent debt, making a total of $9.4 billion owed to private external lenders in the rest of 2020, by at least 46 of the 77 countries covered by the G20 deal.

Jubilee Debt Campaign has calculated that of foreign currency bonds owed by the 77 countries, 90% are governed by English law. This means that if borrowing governments comply with the G20 request and suspend debt payments to the private sector, they could face legal action in UK courts from any of the owners of their debt.

Tim Jones, Head of Policy at Jubilee Debt Campaign, said:

“No country should be forced to choose between paying a debt or providing healthcare in this time of crisis. The UK government can and must urgently pass legislation to prevent any country suspending debt payments due to the coronavirus crisis from being sued in London.

“The UK is the key jurisdiction for international debt contracts. The UK parliament has passed legislation in the past to protect poor countries from being sued by lenders who refuse to participate in internationally agreed debt deals. We need the Government to act now and update the law to prevent this immoral practice.”

In 2010 the UK passed the Debt Relief (Developing Countries) Act. This prevented any creditor suing one of the 40 countries eligible for the Heavily Indebted Poor Countries (HIPC) debt relief initiative for more than the creditor would have got if they had taken part in the debt relief. The Act covered all loans from before 2004. The UK could follow the same principal to prevent lenders suing countries for non-payment of debt due to the coronavirus crisis.

The first payment to private lenders due after the G20 deal came into force is $22.5 million by Mongolia on 1 May, followed by $13.25 million by Rwanda on 4 May. In May alone there are 16 bond payments worth $620 million for nine countries (Angola, Cameroon, Ghana, Grenada, Kenya, Mongolia, Nigeria, Rwanda and Senegal).


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