Oxfam seeks debt moratorium for African countries
Oxfam has called for immediate debt relief and steady financing flows to save African people from the Coronavirus Disease (COVID-19) crisis.
The organisation, an amalgamation of 20 non-governmental organisations (NGOs) working with partners in over 90 countries to end the injustices that cause poverty, made the call ahead of the decision by the G20 leaders to hold a virtual extra-ordinary summit for the health crisis and economic recession triggered by COVID-19.
It stated yesterday that the G20 leaders could not afford to ignore calls for a debt moratorium for African countries, to give a lifeline to the many Africans whose livelihoods had been disrupted by the pandemic.
Speaking ahead of the summit in Nairobi, Kenya, Oxfam Pan-Africa Director, Peter Kamalingin, 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 the capacity to cope with the pandemic of international institutions.”
Africa, he added, is facing the worst health and economic crisis in decades amid declining tax revenues, diminishing official development assistance and rising debt obligations.
His words, “The slump in commodity prices and disruption of global supply chains, especially in China, as a result of the pandemic, is already hitting African economies hardest.”
According to him, calls for debt relief last week from the World Bank and International Monetary Fund (IMF) must be welcomed as a first step, but do not meet the needs of Africans in this life-threatening crisis.
The proposal by the World Bank and IMF that “only bilateral debts need to be suspended” will guarantee that much-needed money continues to flow out of the continent (multilateral and private lenders hold most of the debts).
Africa finance ministers, he stressed, should make more sense requesting a coordinated waiver on all interest payments, amounting to $44 billion for 2020, which could provide more fiscal space for governments as they respond to the pandemic.
Kamalingin added, “Even that is too small. No African country can afford to make any debt repayment 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 re-financing at least in the short term and most likely in the medium term.
“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.”