ADDIS ABABA – Africa needs more than 100 billion US Dollars as an emergency economic stimulus to counter the impact of coronavirus outbreak, according to its finance ministers.
Finance Ministers of African nations met on 19 March in a virtual conference to exchange ideas on the efforts of their respective governments in dealing with the social and economic impacts of the virus.
The meeting took place a week after the United Nations has estimated that the continent’s GDP growth rate will fall from 3.2 percent to 1.8 percent this year due to the impact of the noble coronavirus (COVID-19).
Even before the COVID-19 pandemic, Africa was already experiencing a huge financing gap in funding measures and programs aimed at realizing Sustainable Development Goals targets and goals.
On Thursday’s meeting, the ministers agreed on three areas – the need for coordination on logistics, stimuli the economy and support the private sector, according to UN Economic Commission for Africa (UN ECA).
They emphasized that, without coordinated efforts, the COVID-19 pandemic will have major and adverse implications on African economies and the society at large.
The Ministers agreed to work on a coordinated response in the logistics and delivery of testing equipment in collaboration with WHO and existing continental institutions, in particular, the African Union and Africa CDC.
– Stimulus fund –
According to the ministers, Africa needs an immediate emergency economic stimulus to the tune of 100 billion US Dollars.
They also said waiver of all interest payments and the possible extension of the waiver to the medium term “would provide immediate fiscal space and liquidity to the Governments”, in their efforts to respond to the COVID-19 pandemic.
African countries all interest payments for 2020 is estimated at 44 billion US dollars, according to reports.
“The interest payments waiver should include not only interest payments on public debt, but also on sovereign bonds,” they agreed.
For fragile states, the ministers agreed on the need to consider waiving principal and interest and encourage the use of existing facilities in the World Bank, International Monetary Fund (IMF), African Development Bank (AfDB) and other regional institutions.
– Support the Private Sector –
On Thursday’s meeting, the ministers underscored the need to support the private sector and protect the over 30 million jobs at risk, particularly in the tourism and airline sectors across the continent.
They also touched up on other critical sectors including agriculture, imports and exports, pharmaceuticals and in banking.
On these sectors, the ministers agreed that “all interest and principal payments on corporate debt, leases, extended credit facilities, refinancing schemes and guarantee facilities should be used to waive, restructure and provide additional liquidity in 2020”.
A liquidity line should also be made available to the private sector to ensure the continuity of essential purchases and all SMEs that are dependent on trade can continue to function, the said.
These measures, it was agreed, must accompany a policy of opening borders for trade.