Deterring the Debt Vultures in Africa
The COVID-19 pandemic threatens to make African countries even more vulnerable to aggressive sovereign-debt speculators. But the crisis also presents financial institutions with an opportunity to change the way they do business and play their part in helping the continent's economies to recover.
PRETORIA – COVID-19 is creating Sub-Saharan Africa’s worst social and economic crisis since World War II. The region’s economy is set to contract by 1.6% in 2020, its worst performance on record. Global merchandise trade could shrink by 13-32% this year, which will hit Africa hard. And the World Health Organization warns that the number of coronavirus cases in Africa could increase to 29-44 million in the first year of the pandemic, with up to 190,000 deaths.
If these predictions turn out to be accurate, the pandemic would overwhelm African countries’ health systems, devastate their economies, and threaten millions of people with unemployment, hunger, and homelessness.
Mindful of these potentially horrific consequences, 18 African and European leaders recently warned that, “only a global victory that fully includes Africa can bring this pandemic to an end.” Among other measures, they called for “an immediate moratorium on all bilateral and multilateral debt payments, both public and private” until the pandemic has passed.