ISLAMABAD: With an external debt stock of $73 billion at the end of 2018, Pakistan by far has emerged as the largest borrower in the list of 15 top Debt Service Suspension Initiative (DSSI) eligible borrowers.

According to the third edition of `Debt Report 2020` published by the World Bank, 85 per cent of this debt is owed to official creditors with nearly half accounted for by multilateral creditors.

The report says the external debt stock of DSSI-eligible countries is highly concentrated. The seven largest borrowers in the group accounted for 52pc at the end 2018 debt stock and the 15 largest borrowers for over 70pc.

Pakistan, Angola, Bangladesh, Kenya, Nigeria, Ethiopia, Ghana, Cote d`Ivoire, Myanmar, Tanzania, Senegal, Mozambique, Zambia, Uzbekistan and Cameroon were the 15 largest borrowers.

Under the DSSI, bilateral official creditors from G-20 countries agree to re-proñle principal and interest payments falling due between May 1 and December 31 this year for countries that request a suspension of debt service and are benefiting from or have sought financing from the International Monetary Fund (IMF). Commercial creditors, working through the Institute of International Finance, have also been called to participate in the initiative on comparable terms.

Countries that benefit from the DSSI are expected to make several commitments, including use of fiscal space created for social, health or economic expenditures related to crisis response; disclosure of all public sector debt, with respect to commercially sensitive information; and refraining from contracting new non-concessional debt during the suspension period, other than agreements in the context of DSSI, or in compliance with limits agreed under the IMF Debt Limit Policy or World Bank policies on non-concessional borrowing.

The Covid-19 DSSI endorsed by the G-20 and the Paris Club on April 15, 2021 responded to calls by the World Bank and the IMF on official bilateral creditors to provide a timebound suspension on debt service to countries that request forbearance.

The DSSI applies to all IDA eligible and UN-listed least developed countries with the exception of countries with protracted arrears to official and private creditors.

The combined public and publicly guaranteed debt of the 68 DSSI-eligible countries that report to the World Bank Debtor Reporting System was $489 billion at the end of 2018.

Obligations to multilateral creditors, including the IMF, comprised the largest share, 45pc. Debt owed to bilateral creditors accounted for 35pc and non-ofHcial creditors (bondholders, commercial banks and other private entities) the remaining 20pc.

The projected debt service payments in 2019 totaled $45.8bn, comprising $32.5bn in principal payments and $13.3bn in interest payments. Due to the highly concessional nature of most multilateral lending the creditor distribution of debt service payments is the obverse of that for debt stocks. Multilateral creditors account for the smallest share of debt service payments, 27pc, and nonofficial creditors the largest, 39pc, because interest rates are higher and maturities shorter on loans from these creditors.