The Africa Confidential Blog
Cautious concession from the G-20
So far, Africa has not seen the death tolls that have become daily reality in Europe and North America, but the scale of the damage to its economies from the coronavirus pandemic is becoming clearer.
On 15 April, the International Monetary Fund forecast that Africa's economy will shrink by at least 1.6% in 2020, and its real income per head will fall by 3.9%. Earlier that day the Group of 20, pushed by France's President Emmanuel Macron, agreed to suspend some debt payments due from 77 of the poorest countries. It will cover US$12 billion of debt service, but the ministers insisted that deferred payments should be made between 2022 and 2024, along with interest accrued. This may just postpone unmanageable obligations if the IMF's forecasts of the pandemic's medium-term effects prove true.
The G-20 resisted calls to work with the UN on a coordinated response to the pandemic including a special forum on debt restructuring and finance in developing economies. Well ahead of the G-20, the IMF has cancelled debt payments from 25 countries over the next six months and allocated $100bn for emergency loans.
Staying apart from these initiatives are the commercial creditors due to collect some $8bn in service payments, say French officials, from 77 poor states over the next year. Banks say they are not planning any debt restructuring, warning that defaults would lock countries out of the market. Yet they will face more pressure to make concessions at the IMF and World Bank meeting on 17 April.