News & Analysis: Debt and debt relief

It’s way past midnight for the South Africa project

“The coronavirus is mostly to blame for the recent collapse, the deterioration in SA’s economic and fiscal strength over the past decade is not the result of external shocks but the government’s failure to change its approach to managing the economy.”

via Financial Mail

Creditors fume as the beat goes on

“After the default, the bondholders and Chinese creditors are jostling for priority but secrecy and local politics are blocking a credible solution.”

via Africa Confidential

Why the developing world needs a bigger pandemic response

“The appeal of SDRs for developing countries is that they fill a gap in the toolkit available to advanced economies: money creation. While advanced economies have been able effectively to print money by buying their own bonds in a world of low or negative interest rates, most developing countries cannot do that without risking instability.”

via Financial Times

The ‘blood, sweat and tears’ behind Zambia’s default

“When Zambia sold the last of its three US dollar bonds in 2015, it capped a decade in which the copper-endowed African country went from needing debt relief reserved for the world’s poorest nations to tapping the global capital markets with ease. But just five years later, that bond is in default, with the rest of Zambia’s $3bn international bond borrowings.”

via Financial Times

As new debt crisis looms, Africa needs more than world is offering

“African countries face another debt crisis and will need more long-term help than the latest G20 debt plan offers them to ward off trouble ahead and keep much-needed investments coming in, according to policymakers, analysts and investors.”

via Reuters

Bargaining with Beijing: A Tale of Two Borrowers

“The fact that the Republic of Congo was worse off after rescheduling its debts with Beijing underscores the importance of exposing these deals to public scrutiny before they are finalized and building borrower country capacity to negotiate more favorable deals.”

via Center for Global Development

In reversal, Kenya plans to defer $690 million in debt payments under G20 initiative

“Kenya has changed its mind about a G20 coronavirus debt relief initiative it declined to join earlier this year, and is now planning to defer around $690 million in debt payments, its finance minister told Reuters on Wednesday.”

via Reuters

G20 and development

“The G20 in both the finance and Sherpa track should develop a set of guiding principles for engaging with low-income and fragile states in this post-COVID environment. The focus should be on mitigating the development impacts of the pandemic in both social, economic and security terms.”

via SAIIA

Africa’s First Pandemic Default Tests New Effort to Ease Debt From China

“A new framework to resolve debt crises in developing countries, meant to ensure that Chinese and private creditors share the burden of providing relief, faces a key test after Zambia became the first African nation to default during the coronavirus pandemic.”

via Wall Street Journal

Zambia’s Debt Default: A Lose-Lose Situation

“Some of the world’s poorest countries don’t have the liquidity available to keep their economies afloat, tackle the emergency COVID-19 response, and provide social safety nets for the most vulnerable. This is the case with Zambia.”

via Africa.com