The world's richest countries agreed on Wednesday, 15 April to freeze poor nations' debt obligations, shortly after nearly 20 European and African leaders made a joint appeal for a massive international effort to boost Africa's coronavirus response, saying that “only a global victory that fully includes Africa can bring this pandemic to an end.”
Finance ministers of the G-20 group of major economies, which includes the US, China, India and others, said they will immediately put on hold poor countries' obligations to service debt they owe.
The statement issued after a video conference put to rest concerns that China would block such a measure, which is aimed at helping the poorest nations focus their spending on healthcare and assistance to vulnerable people to contain the outbreak and its fallout.
The joint appeal signed by the leaders of France, Ethiopia, Germany, South Africa and other nations, published in the Financial Times, had called for dramatic measures that include an immediate moratorium on all debt payments, public and private, until the pandemic is over.
While the G-20 did not specify how long the debt holiday would last or how many countries would benefit, French Finance Minister Bruno Le Maire said 76 countries were eligible for the moratorium, including about 40 in sub-Saharan Africa.
Debt payments worth $20 billion will be suspended including $8 billion owed to private creditors and $12 billion owed to other countries, he said.
An additional $12 billion in debt payments to multilateral institutions like the World Bank are also under consideration for a debt freeze.
“This is a powerful, fast-acting initiative that will do much to safeguard the lives and livelihoods of millions of the most vulnerable people,” said World Bank Group President David Malpass and IMF Managing Director Kristalina Georgieva in a joint statement.
African officials have joined forces in recent days to appeal for billions of dollars in financial assistance and improve their position in the global competition with richer countries for badly needed medical equipment.
The African Union appointed four special envoys to mobilize support and created a platform to help the continent's 54 countries bulk-buy medical goods at more accessible prices.
While virus cases among Africa's 1.3 billion people total more than 16,000, health experts have said the continent is weeks behind the US and Europe in the pandemic and the rise in cases looks alarmingly similar to Europe's.
As the world braces for potential waves of the virus, the joint appeal said no region will be safe if Africa, with largely weak health systems, is left to fend for itself.
An “unprecedented effort” is required, the appeal said, directly addressing the World Bank and IMF. “We must deploy a huge economic stimulus package of at least $100 billion” to give Africa the resources it needs to fight the virus.
The IMF on Monday approved $500 million to cancel six months of debt payments for 25 of the world's most impoverished countries, including 19 African ones, so they can help tackle the pandemic.
On Wednesday, the IMF said sub-Saharan Africa could see minus-1.6% growth this year, “the lowest level on record.” Recent strides in development could be reversed, it said, and “no country will be spared.” Calls for assistance have been growing at the highest levels. In his Easter message, Pope Francis called for debt forgiveness for the world's poorest countries, saying they are being hardest hit by the pandemic and must not be “abandoned.” Africa's debt-to-GDP ratio has climbed from 30% in 2012 to 95% today, said French President Emmanuel Macron in an interview posted Wednesday with Radio France Internationale. “So we absolutely must help Africa to strengthen its capacities to respond to the health shock, and we must help it to respond economically to this crisis,” said Macron.
It is a moral, human duty, Macron added, also calling on China, a major lender to African nations, to help. Macron recently made a similar call at a videoconference for G20 leaders. He's also pushing for debt rescheduling and, in some cases, debt cancellation.
The UN Economic Commission for Africa has said the pandemic could seriously dent already stagnant growth in many countries, with oil-exporting nations like Nigeria and Angola losing up to $65 billion in revenue as prices fall. “Livelihoods will be wiped out in a way we have never seen before,” Ahunna Eziakonwa, the United Nations Development Program regional director for Africa, has said.
The new appeal, signed by all European leaders of the G20, welcomed a European Union plan for a pledging conference in May.
And as fears grow that resources to tackle other crises on the continent — from hunger to conflict to malaria and HIV — will be drained by the pandemic, the appeal urged humanitarian groups to protect their aid budgets.
Meanwhile, the World Food Program should lead an effort to deliver food and other critical needs to people, including refugees and migrants, in a growing number of African countries under lockdown, the appeal said. Millions of informal workers and others who rely on daily work for their next meals have been affected.
“No region can win the battle against COVID-19 alone,” the appeal said. “If it is not beaten in Africa, it will return to haunt us all.”
(The story has been published in an arrangement with PTI.)
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