'Africa needs emergency stimulus package and interest waivers'

Africa needs an immediate emergency economic stimulus to the tune of $100 billion and waiver of all interest payments, estimated at $44 billion for 2020 in view of the Coronavirus pandemic.

African Ministers of Finance made this call in a virtual conference arranged by the Economic Commission for Africa from its Addis Ababa Headquarters, where they further asked for the possible extension of the waiver to the medium term, which would provide immediate fiscal space and liquidity to the Governments, in their efforts to respond to the COVID-19 pandemic.

In a release copied to the Ghana News Agency, the Ministers requested interest payments waiver to include not only interest payments on public debt, but also on sovereign bonds.

For fragile states, the Ministers agreed on the need to consider waiving principal and interest and encourage the use of existing facilities in the World Bank, International Monetary Fund (IMF), African Development Bank (AfDB) and other regional institutions.

They underscored the need to support the private sector and protect the over 30 million jobs at risk, particularly in the tourism and airline sectors across the continent.

In other critical sectors including agriculture, imports and exports, pharmaceuticals and in banking, the Ministers agreed that all interest and principal payments on corporate debt, leases, extended credit facilities, refinancing schemes and guarantee facilities should be used to waive, restructure and provide additional liquidity in 2020.

A liquidity line should also be made available to the private sector to ensure the continuity of essential purchases and all SMEs that were dependent on trade can continue to function.

These measures, it was agreed, must accompany a policy of opening borders for trade.

In this regard, the Ministers noted that Europe and the United States, in particular, can build this in as part of their stimulus to their private and financial systems.

As part of an immediate health response, they asked for coordinated response in logistics and delivery of testing equipment.

The Ministers emphasised the need to work with the World Health Organisation and existing continental institutions, in particular, the African Union and Africa Centres for Disease Control and Prevention, while making maximum use of existing systems and funding partners, such as the Global Fund.

Particular attention should be placed on fragile states and vulnerable populations, especially women and children and those living in informal urban settlements.

Given the limited health infrastructure and the fact that most of the pharmaceuticals and medical supplies consumed in Africa were imported, the Ministers called on the international community to support the upgrade of the health infrastructure and to provide direct support to the existing facilities.

The Ministers noted that even before the COVID-19 pandemic, Africa was already experiencing a huge financing gap in funding measures and programmes aimed at realising SDGs and Agenda 2063 targets and goals without which the pandemic will have major and adverse implications on African economies and the society at large.

The original economic forecasts in most economies were on average, being downgraded by two to three percentage points for 2020 due to the pandemic.