AFRICAN FINANCE Ministers have called for a moratorium on all debt interest payments by their governments in response to the coronavirus crisis.
African Finance Ministers 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 COVID-19.
They noted that even before the COVID-19 pandemic, Africa was already experiencing a huge financing gap in funding measures and programmes aimed at economic development.
They estimate that cancelling debt interest payments would save $44 billion in 2020.
Their call has been backed by Head of the World Bank David Malpass.
The Finance Ministers have said a moratorium should cover interest payments to multilateral institutions, other governments, and private loans such as Eurobonds.
Reacting to the news, Tim Jones, Head of Policy at Jubilee Debt Campaign said: “African Finance Ministers are right to call for a moratorium on all interest payments. In the face of a huge health and economic crisis, halting debt payments is the fastest way to keep money in African countries.”
He continued: “All creditors need to respond quickly by accepting this call for a moratorium. Extending it to principal payments coming due this year would further help in tackling the crisis.”
David Malpass has also called for a suspension of all debt payments to other governments for the poorest countries.
However, he claimed countries should, in addition to this move, implement a set of free market economic policies such as removing regulations and subsidies.