This week, the G-20 nations agreed to suspend bilateral debt service payments until the end of the year for 76 low-income countries eligible for the World Bank’s most concessional lending via the International Development Association. The list of eligible countries includes 40 sub-Saharan African countries. Notably, Angola and South Africa are not included as they borrow from the International Bank for Reconstruction and Development, the World Bank Group organization that lends to middle-income countries. In total, $20 billion in debt service payments will be suspended, including $8 billion from private sector creditors. In a statement, the G-20 called on other private lenders to voluntarily “participate in the initiative on comparable terms.” For more on the call for debt relief in Africa, see the recent Project Syndicate piece, “Africa needs debt relief to fight COVID-19,” by AGI Director Brahima S. Coulibaly and co-authors.
In related news, the International Monetary Fund (IMF) approved six months of debt service relief for 25 low-income countries, including 19 in Africa. The suspension of the IMF’s debt service is through the institution’s Catastrophe Containment and Relief Trust and can be extended up to two years. In addition to this move, the IMF also approved additional funding support for several African countries, including Chad, Ghana, and Senegal. For more on the predicted fiscal fallout of COVID-19 in Africa, see this week’s “Figures of the week: The macroeconomic impact of COVID-19 in Africa.”
The international community and bilateral partners are also looking to support Africa in other ways during this crisis. For example, on Tuesday, the European Union announced a 50 million euro ($54 million) donation to Nigeria to support the country’s efforts to fight COVID-19. On Friday, Indian Prime Minister Narendra Modi promised to send essential medical supplies to South Africa.