External Debt Relief: A Ray of Sunshine for African Economies

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Friday, March 27, 2020 / 2:30 PM / United Capital Research / Header Image Credit: The World Bank Group

 

Recently, in a bid to provide relief to developing economies affected by the COVID-19 pandemic, the World Bank and International Monetary Fund (IMF) announced the suspension of debt repayments by the world's poorest countries, under the International Development Association (IDA). Also, the two supranational agencies went a step further, by calling on other official bilateral creditors, to suspend debt payments from IDA countries that request forbearance (temporary postponement of debt payments).

 

For context, the World Bank, through the IDA and the International Bank for Reconstruction and Development (IBRD), is currently providing credits and loans to about 35 African countries. As at 31st Jan-2020, the original principal value of IBRD loans and IDA credits for select countries were: Nigeria ($11.5bn), Ghana ($4.0bn), Kenya ($8.5bn), Cote d'Ivoire ($3.5bn), Senegal ($2.9bn), Benin ($1.4bn), Burkina Faso ($2.0bn) and others.

 

No doubt, this action could not have come at a better time for African economies, as city lockdowns and restrictions, as well as the volatility in the price of key export commodities are expected to slow down economic activities and significantly drag government revenue generation. Also, this gives more room for fiscal and monetary resources to be directed at palliating the negative effects of the COVID-19 break, by promoting easy access to credit, liquidity and softer terms for businesses, fiscal stimulus, as well as developing critical healthcare infrastructure. 

 

Top African Stories

  • Coronavirus: IMF, World Bank suspend debt payments by Nigeria, others: The International Monetary Fund and World Bank on Wednesday announced plans to hold on debt payments from Nigeria and other sub-Saharan Africa nations so that they can battle the coronavirus pandemic. Read more

  • Uganda cuts growth forecast as coronavirus pandemic hurts tourism: Uganda sees economic growth slowing to 5.2% to 5.7% in 2019-20 from an earlier forecast of 6% depending on the severity of the impact coronavirus pandemic, the Finance Ministry said. Read more

  • South African port closures to hit global copper supply: South Africa's main export terminals will be closed to mineral exports from midnight on Thursday when a nationwide 21-day lockdown over coronavirus begins, disrupting copper supply from major producer Zambia. Read more

  • S.Africa coronavirus cases exceed 900, Ramaphosa urges G20 aid: South Africa's number of coronavirus cases jumped to more than 900 on Thursday and President Cyril Ramaphosa called for richer countries to help African nations deal with the economic fallout, hours before the start of a countrywide lockdown. Read more

  • Kenyan MPs mull coronavirus pay cut: Members of parliament in Kenya are considering whether to follow the example of President Uhuru Kenyatta by accepting a temporary pay cut in response to coronavirus. Read more

  • AfDB launches project to tackle electricity metering challenges in Cameroon: The African Development Bank and the multi-donor Fund for African Private Sector Assistance (FAPA) have joined the government of Cameroon to launch an initiative to bolster the deployment of electricity metering services in the country. Read more

 

Looking Forward

 

Angola

Mar-2020 Benchmark Interest Rate - March 27th

Mar-2020 CPI YoY - April 15th

 

Egypt

Q4-2019 GDP Report - March 31st

Mar-2020 IHS Markit Egypt PMI - April 5th

 

Ghana 

Q4-2019 GDP YoY - April 15th

Mar-2020 CPI YoY - April 15th

 

Kenya

Mar-2020 CPI YoY - March 31st

Q4-2019 GDP YoY - April 6th

 

Morocco

Q4-2019 GDP YoY - March 31st

Mar-2020 - CPI YoY - April 20th

 

Nigeria

Mar-2020 Private Sector Credit YoY - April 14th

Mar-2020 CPI YoY - April 15th

 

South Africa

Feb-2020 Mining Production YoY - April 9th

Feb-2020 Trade Balance - March 31st

  

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Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


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