Finance

Some African debts need to be canceled, SA’s President Cyril Ramaphosa says

Some African debts need to be canceled, SA’s President Cyril Ramaphosa says
Tuesday, 22 June 2021 18:46

The South African President Cyril Ramaphosa (pictured) is calling for the cancelation of some of Africa’s debt. Speaking yesterday during the Qatar economic forum, the President said “Special drawing rights should be made available. Some debts need to be canceled,” to close Africa’s financing gap estimated at $400 billion.

“Without that support, Africa would forever be left behind [...] What we need now is to be given that opportunity. We can get up with our bootstraps but we do need that lift,” he said.

Although Africa’s debt remains low in volume compared to the world scale, its repayment is becoming a challenge for African governments, as it eats up a significant part of the public budget. So far, the initiatives implemented are those of a moratorium for repayment of interest from the G20, and the global framework for managing the debt of poor countries, which is struggling to flourish because it is considered too restrictive. While this debate is taking place, several African countries have returned to the international debt market to mobilize resources and take advantage of interest rates that are currently favorable.

But this grace period may end at any time. China is already almost over the covid-19 pandemic, and in Europe, North America, and the UK, activity is gradually picking up as the number of people vaccinated increases. A confirmation of this upturn could make borrowing conditions more difficult for Africa.

On May 18, at the Paris summit on financing Africa, France suggested the idea of a new issue of Special Drawing Rights (SDRs) from the International Monetary Fund. This could increase Africa's external liquidity by $33 billion, and by $100 billion if rich countries agree in principle to give up their new SDRs. But even at that level, investors say it may not be enough.

The use of SDRs will be highly regulated. Also, the import bill is likely to increase as the price of agricultural and energy products rises, coupled with a rise in the value of the dollar. The option of total cancelation of certain African debts thus becomes more than relevant. Several international civil society groups are also calling for debt cancellation for Africa.

Idriss Linge

On the same topic
Ethiopia to open banking sector to foreign investors, allowing up to 49% ownership while maintaining domestic control. New NBE directive sets strict...
Hop Lun acquires three lingerie factories in Morocco Expansion boosts access to EU via trade agreement Marks firm's first manufacturing entry into...
Uganda plans to borrow around $2.5 billion for major infrastructure and energy projects. The loans involve the World Bank’s IDA, Citibank, and...
CDC-CI Capital invests CFA800 million in Julaya through convertible bonds. The fintech will expand payment, cash management, and SME credit...

Most Read
01

BYD to install 200-300 EV chargers in South Africa by 2026 Fast-charging stations powered by grid...

China's BYD Plans 300-Station EV Charging Network for South Africa
02

Drones to aid soil health, pest control, and input efficiency High costs, skills gap challenge ac...

Kenya Plans National Drone Rollout to Modernize Farming
03

• Parliament approves Virtual Asset Service Providers Bill 2025 to regulate digital assets• Central ...

Kenya passes landmark law to regulate booming cryptocurrency market
04

• The five-year plan allocates 388 billion pulas to boost growth and jobs.• Focus areas include tran...

Botswana unveils $27bn plan to accelerate economic diversification
05

• The Bank urges Nigeria to raise excise taxes on alcohol, tobacco, and sugary drinks.• Current rate...

World Bank backs higher public health taxes in Nigeria
Enter your email to receive our newsletter

Ecofin Agency provides daily coverage of nine key African economic sectors: public management, finance, telecoms, agribusiness, mining, energy, transport, communication, and education.
It also designs and manages specialized media, both online and print, for African institutions and publishers.

SALES & ADVERTISING

regie@agenceecofin.com 
Tél: +41 22 301 96 11 
Mob: +41 78 699 13 72


EDITORIAL
redaction@agenceecofin.com

More information
Team
Publisher

ECOFIN AGENCY

Mediamania Sarl
Rue du Léman, 6
1201 Geneva
Switzerland

 

Ecofin Agency is a sector-focused economic news agency, founded in December 2010. Its web platform was launched in June 2011. ©Mediamania.

 
 

Please publish modules in offcanvas position.