Ghana asks China to step up on Africa debt relief

China must do more to help ease the debt burden of African countries facing economic calamity as a result of the coronavirus pandemic, Ghana’s finance minister, Ken Ofori-Atta said on Monday.

According to Ken Ofori-Atta, Europe may also need to offer special drawing rights – a form of foreign exchange reserves managed by the International Monetary Fund – to shield Africa from commercial debt defaults.

There are now more than over 10,000 confirmed cases of coronavirus across the continent, with a number of African countries imposing a range of prevention and containment measures against the spread of the pandemic.

Mr. Ken Ofori-Atta’s call comes a week after finance ministers from African countries, most of them teetering towards debt default, called for US$100 billion in bailouts and debt relief to help them cope with the devastating effects of the outbreak.

According to the International Monetary Fund (IMF), seven of the 35 low-income countries in Sub-Saharan Africa are in debt distress and a further nine have a high risk of debt distress. It says China is the largest lender to African countries.

The Economic Commission for Africa (ECA), a regional agency of the United Nations, has warned that the pandemic could cut the continent’s GDP from 3.2 per cent to below 2 per cent as the crisis disrupts global supply chains.

The ECA has estimated that export revenues will fall US$101 billion, including US$65 billion for the oil-producing countries including Angola and Nigeria, as crude oil prices continue to tumbl

China is estimated to hold about a fifth of the total debt in Africa, according to London-based Jubilee Debt Campaign, which is pushing for the debts of the poorest countries to be cancelled.

China advanced more than US$143 billion to African countries between 2000 and 2017, according to figures from the China Africa Research ¬Initiative at the Johns Hopkins School of Advanced International Studies in Washington.

Posted by on April 7, 2020. Filed under Finance. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.