COVID-19: African finance ministers call for debt relief from development partners

Ministers of Finance in Africa have called for debt relief from bilateral, multilateral and commercial partners to ensure that African countries get the fiscal space required to deal with the COVID-19 crisis.

They made the call during a virtual meeting hosted by the Economic Commission for Africa (ECA), against the backdrop of rising COVID-19 cases in Africa.

A statement issued by the Communications Section of the ECA in Addis Ababa on Wednesday, said the meeting was hosted by Vera Songwe, the Executive Secretary.

According to the statement, the ministers also appealed to the International Monetary Fund (IMF), the World Bank Group (WBG) and the European Union (EU) to support the continent to get debt relief.

“The call for debt relief should be for all of Africa and should be undertaken in a coordinated and collaborative way.’’

They also called for a special purpose vehicle to be created to deal with all sovereign debt obligations.

“Substantial drop in revenue from commodity price drops coupled with increasing costs of imports is putting pressure on both inflation and the exchange rate.

“Given that the global economy has entered a period of a synchronized slow down, with recovery only expected after about 24 to 36 months, development partners should consider debt relief and forbearance of interest payments over a two to three-year period for all African countries.’’

The ministers also acknowledged the importance of the private sector for job creation and for the recovery effort.

They called on Development Finance Institutions (DFIs) to support the private sector in this difficult time.

They said that since Africa was a net importer of pharmaceutical products, enabling local continental production could serve to protect some jobs and guarantee supply of essential medicines during the crisis.

The statement added that the ministers called for joint protocols on border closures to allow for trade and humanitarian corridors.

According to it, the ministers discussed the enormous losses being incurred in the airline and hospitality industry.

They, however, called for the protection and preservation of African airlines, logistics and tourism industry by advocating for a stay on interest, lease and debt payments.

“This is an important job creating sector for millions of Africans and must be protected,’’ they said.

They also agreed to set up a meeting for countries affected by transport and tourism losses due to the pandemic, to better plan on policies to combat the losses.

The ministers said that immediate focus must remain on the health and humanitarian front, adding that awareness raising, testing and social distancing should be continued.

They welcomed the use of technology such as mobile phones to support awareness raising, identify communities in need and create accountability and governance mechanisms around the use of the stimulus.

“The ministers asked the ECA to work with the telecommunications company to design a system to support these objectives,’’ the ministers said. (NAN)