France said Tuesday that the G20 group of industrialized nations have agreed to a partial moratorium on debt payments this year from the world’s developing countries, many of them in Africa. French President Emmanuel Macron wants to go further.
Forty of the world’s 76 low-income countries qualifying for debt payment relief this year are in sub-Saharan Africa.
French Economy Minister Bruno Le Maire said they could get a total $20 billion reprieve in debt servicing from private creditors and countries, including China. The International Monetary Fund announced Monday short term debt relief for 25 developing countries, again mostly ones in Africa.
But President Macron is ramping up the stakes. Addressing the nation Monday night, he said France and the European Union should help Africa fight coronavirus with a massive debt cancellation. Pope Francis made a similar call for developing nations.
Africa still has a relatively small number of coronavirus cases. But experts fear that could change dramatically — with potentially catastrophic consequences for a continent with a weak health infrastructure and where many live on the edge. Already, the United Nations predicts overall African economic growth will be cut in half this year.
Last week, France pledged about $1.4 billion in coronavirus-related aid to Africa, while European Commission President Ursula von der Leyen announced more than $16 billion in support for developing nations. In both cases, the money simply reshuffled existing funds.
“Africa could experience the same problems we are facing in a matter of weeks," said Leyen. "They need our help to slow down the spread of the virus, as we needed help in this crisis.”
African countries want more. Ethiopian Prime Minister Abiy Ahmed, for example, is urging G20 leaders to provide not only debt relief but also $150 billion in emergency funds for the continent to battle coronavirus.
Laurent Bossard, Sahel and West Africa club director for the Paris-based Organization for Economic Cooperation and Development, thinks nations with the most advanced economies must think long term, as they craft massive rescue packages for themselves.
“We are talking about thousands of billions. And I’m wondering if these packages could or should—surely should—imperatively include financial means to rebuild the African economy,” said Bossard.
That may be a challenge as many industrialized nations face their biggest economic slump in decades. But experts say leaving Africa and other poor countries out of rescue efforts, could carry both health and economic consequences down the road.