March 27 (EIRNS)—The African nations are calling for a suspension of interest payments on their multilateral and sovereign bond debt due in 2020, so as to free up $44 billion to confront the coronavirus and its economic impact. A moratorium on principal as well as interest is urged for the “fragile” African nations, such as the Sahel nations, Central African Republic, and others.
This call was made after a (virtual) crisis meeting of the continent’s finance ministers on March 19, and reiterated in a statement directed to the G20 before it began. (“Three Things the G20 Must Do To Support Africa in COVID-19 Pandemic”).
Our nations will coordinate the logistics and delivery of testing equipment, they wrote, but we require international help to upgrade our health infrastructure, as well as support the existing facilities. For example, most pharmaceutical and medical supplies consumed in Africa are imported, they point out.
The ministers calculate that Africa needs an immediate economic stimulus of $100 billion (in addition to $50 billion already committed by G20 nations and an additional liquidity line for the private sector and small to mid-size enterprises). The proposed waiver on interest payments would generate $44 billion towards that.
Ethiopian Prime Minister Abiy Ahmed went further, in his “Three Point Proposal” to the G20. He proposed that a “Global Africa Health Emergency Package” be put together to help supply medical equipment, test kits, and protective clothing to the continent, but on top of that, Ahmed urged that all interest payments on government loans be not just suspended, but entirely written off.
“In addition, we suggest the remaining debt be converted into long-term, low-interest loans with 10 years grace period before payment. All debt repayments will be limited to 10% of the value of exports.”