- Debt Relief: African Finance Ministers Commence Talks With Creditors
African finance ministers have commenced talks with private creditors on how to temporarily suspend debt payments without triggering defaults.
In the virtual meeting held with more than 100 creditors on Monday, about twelve African finance ministers spoke on the methodology that would allow African nations to suspend payments and still have access to debt markets in the future.
The finance ministers have said the continent needs about $100 billion to protect 30 million jobs and stimulate growth following the damages done by COVID-19 on the continent largely regarded as vulnerable with little to zero fiscal buffer to cushion the negative effect of the pandemic.
According to Bloomberg, while official creditors seem to have agreed to the terms proposed by the African Finance Ministers, private investors are reluctant to join the initiative due to financial complexities and legal issues.
A source quoted by Bloomberg said Vera Songwe, the head of the United Nations Economic Commission for Africa, participated in the meeting while Tidjane Thiam, the African Union’s special envoy, chaired the discussion, according to a statement by UNECA and the Washington-based Institute of International Finance.
“A one-size-fits-all solution may not apply in light of country specific characteristics,” they said in a joint statement. “Communication to and from all stakeholders needs to be well managed so as not to cause an unnecessary disruption in the crucial flow of private capital.”