African finance ministers have called for a $100 billion stimulus package, including a suspension of debt service payments, to help the continent combat coronavirus.
Some $44 billion would come from not servicing debt and they would also tap existing facilities in the World Bank, International Monetary Fund (IMF), African Development Bank (AfDB) and other regional institutions.
The ministers held a virtual conference on Thursday to
discuss how to deal with the social and economic impacts of the pandemic on
African nations, a statement by the United Nations Economic Commission for
Africa said on Monday.
It did not specify which countries participated in the
Africa is facing the combined shock of coronavirus, which
threatens to strain under-funded health systems, as well as a sharp drop in
revenues due to plunging oil and commodities prices.
Emergency stimulus plan
“Africa needs an immediate emergency economic stimulus to
the tune of $100 billion,” the statement said.
The proposed interest payment waiver would include not only
interest payments on public debt but also on sovereign bonds. It would save
governments an estimated $44 billion this year, and would possibly need to be
extended to the medium term, it added.
“(A waiver) would provide immediate fiscal space and
liquidity to the governments in their efforts to respond to the COVID-19
pandemic,” the statement said.
For fragile states, the ministers agreed that waiving repayment
of both principal and interest should be considered.
Though African nations currently count only a fraction of
global coronavirus cases, experts worry that their cash-strapped and
under-equipped healthcare systems make them ill prepared to tackled large-scale
Meanwhile, sub-Saharan Africa’s debt has ballooned to nearly
60% of GDP over the past decade, meaning many governments must devote
significant resources to debt service.
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