China asked to write off more African debts as coronavirus hits economies
- African countries ask for relief to focus on containing pandemic and absorb its impact on exports and GDP
- World Bank and IMF add to call for G20 – of whom China is the biggest lender to Africa – to ease pressure on countries struggling to cope
African countries, most of them teetering towards debt default, have called for US$100 billion in bailouts and debt relief to help them cope with the devastating effects of the outbreak. Their economies are limping after they ramped up measures to curb the spread of the virus, including lockdowns and the grounding of airlines, affecting trade, travel and tourism.
When the continent’s finance ministers met on Tuesday, they called for debt relief and fiscal stimulus packages for all countries. In a statement issued after the meeting, they said a “waiver of all interest payments on bilateral and multilateral debt, and extension of the waiver to the medium term” would allow them to focus on dealing with the outbreak.
According to the International Monetary Fund (IMF), seven of the 35 low-income countries in Sub-Saharan Africa are in debt distress and a further nine have a high risk of debt distress. It says China is the largest lender to African countries.
The Economic Commission for Africa (ECA), a regional agency of the United Nations, has warned that the pandemic could cut the continent’s GDP from 3.2 per cent to below 2 per cent as the crisis disrupts global supply chains.