G20 called upon to provide immediate debt relief to save African people from a massive COVID-19 crisis
Nairobi. Oxfam has welcomed the decision by the G20 leaders to hold a virtual Extra- Ordinary Summit to respond to the health crisis and an economic recession triggered by Covid 19.
Oxfam says the G20 leaders meeting today, Thursday March 26 cannot afford to ignore calls for a debt suspension for African countries in order to save lives now and give a lifeline to the many Africans whose livelihoods have been disrupted by the pandemic.
Speaking today ahead of the virtual Summit, Peter Kamalingin, Oxfam Pan Africa Director said this is the moment that Africa needs to use all its existing resources to cope with the emergency.
“It makes no sense for African countries to transfer much-needed resources to foreign banks, developed nations with capacity to cope with the pandemic or international institutions,” he said.
Africa is facing the worst health and economic crisis in decades amidst declining tax revenues, diminishing official development assistance, and rising debt obligations and costs.
The slump in commodity prices and disruption of global supply chains, especially in China, as a result of the pandemic has already hit African economies.
According to him, Africa Finance Ministers make more sense requesting a coordinated waiver on all interest payments, amounting to US$44bn for 2020, which could provide more fiscal space for governments as they respond to the pandemic.
“No African country can afford to make any debt repayments in 2020 - whether owed to bilateral creditors, multilateral institutions or private lenders without putting millions of African lives at risk. New money will not be available for refinancing at least in the short term and most likely in the medium term.”
He says that a universal debt repayment suspension needs to be put in place to allow African countries to focus in strengthening their public health systems to adequately respond to the COVID-19 crisis and provide social protection to the most vulnerable.
“Suspending all debt payments is the fastest way to keep money in countries and free up resources to tackle the health and economic crises.”
Mr. Kamalingin added: Decisions need to be taken now, any delay only serves to worsen the already fragile situation and make the recovery process more expensive. Debt relief free from conditionalities is the best way to leave money in the hands of African governments to make decisions now.
