France and Europe will have to help Africa fight the coronavirus by «massively cancelling its debt», declared French President Emmanuel Macron on Monday. He is not the only one pleading in this direction. Explanations.
On Monday evening, Emmanuel Macron echoed the demands made recently by several African leaders, such as Senegalese Macky Sall, and last Sunday by Pope Francis during his Easter blessing. It is also in line with several international financial institutions such as the IMF and the World Bank, which have been calling since mid-March for debt cancellations or rescheduling for African countries as the coronavirus pandemic threatens. The issue is to be debated this week by the G20 countries on the sidelines of the spring meeting of the International Monetary Fund.
Moratorium, rescheduling, relief or cancellation: for the past three weeks, leaders of major countries and international financial institutions have been proposing solutions to ease the burden on Africa. The economic shock created by the pandemic requires budgetary capacity to be overcome. However, the weight of the African debt prevents countries from releasing these means. In ten years, the African public debt has doubled to 365 billion dollars, 145 of which are owed to China.
Emmanuel Macron wants France and Europe to cancel the debts they have on Africa. But that’s only a small part of the burden. Private debt is now a big part of the total. African countries that have raised funds in the form of Eurobonds in recent years, for example. This private debt, often fragmented, is more difficult to cancel.
In a forum signed by three of the four emissaries appointed by the African Union to coordinate international aid, African officials call for a two-year freeze on debt, principal and interest payments. Time to find the right mechanisms for a long-term solution.
Source : RFI / Par Oliver Rogez