African finance chiefs meet on debt relief

African finance ministers are meeting on Thursday to discuss debt-relief proposals, according to a top United Nations official.

“As we move forward and as we talk about the debt service we’re going to need to talk about governance on the other side, and transparency in terms of how we then use the proceeds from the debt-service standstill,” UN Economic Commission for Africa Executive Secretary Vera Songwe said in an interview on Bloomberg TV.

African countries are discussing a special-purpose vehicle to exchange their sovereign debt for new concessional paper to avoid using funds needed to battle the fast-moving coronavirus to pay private creditors. The mechanism would be underwritten by a triple-A-rated multilateral lender or central bank, and used to convert commercial debt into longer-maturity paper, Songwe said in April.

Key Developments:

  • Spain called on private creditors to waive debt payments from African countries to open up fiscal space needed to battle the coronavirus pandemic, Spanish Foreign Minister Arancha Gonzalez said.
  • Measures by some African countries to get money flowing into the real economy aren’t working yet, with banks parking cash in government bonds as the economic slowdown cuts demand for credit.
  • The International Monetary Fund approved $1.23 billion of emergency funding for Kenya and Uganda, saying the coronavirus pandemic is likely to exact a severe toll on the two East African economies. The loans mean the IMF has disbursed more than $10 billion to African nations to help them combat the virus.


  • The World Bank will give Zimbabwe $7 million to fight the coronavirus pandemic despite the country being in arrears with the Washington-based lender.
  • Private creditors will probably have to waive debt on a case-by-case basis due to legal and financial limitations, the Institute of International Finance said.
  • The Group of 20 nations has called for a debt moratorium for the world’s poorest nations, many of which are in Africa.

© 2020 Bloomberg