News & Analysis: Debt and debt relief

AfDB says COVID-19 is giving East Africa chance to renegotiate debt

“East Africa was the continent’s most resilient region in 2020 due to less reliance on primary commodities and greater diversification compared with other parts of Africa… The region’s real GDP growth will rebound to 3% in 2021 from 0.7% in 2020, with Djibouti, Tanzania, and Rwanda as the potential top performers.”

via The Africa Report

Bank of Uganda keeps policy rate unchanged at 7 percent for April

“Uganda’s Central Bank kept its benchmark policy rate unchanged at seven percent Wednesday in a strategic move that promises stable lending rates amidst increased credit default levels and renewed strength in the value of the Uganda shilling against the US dollar.”

via The East African

Sovereign Debt: A Critical Challenge

“Today, the earlier fear of a dangerous lack of liquidity has been replaced in large part by concerns about the ability of the international financial architecture to support countries with increasing levels of debt and uncertain access to capital. One worrisome aspect seems clear: Many countries will require debt relief in the next few years if they are to maintain or restore access to financial flows. Higher interest rates in advanced economies, and the United States in particular, could compound the difficulties of emerging market countries in servicing existing debt and refinancing maturing debt.”

via Bretton Woods Committee

African nations expect $33.6B in Special Drawing Rights

“African nations expect to receive $33.6 billion from a new issuance of Special Drawing Rights, according to Vera Songwe, executive secretary of the United Nations Economic Commission for Africa. On Wednesday, G-20 finance ministers and central bank governors reaffirmed calls for the International Monetary Fund to make a proposal for a new allocation of $650 billion in SDRs — an international reserve asset — that will provide countries around the world with liquidity. The last SDR allocation was issued in 2009 following the global financial crisis.”

via Devex

Gov’t to Introduce New Taxes, Limit Hiring and Cut Employees’ Allowances to Meet IMF Conditions

“This will be accomplished through continued restraint in hiring and wage awards (including in the four-year wage agreement that will come into effect in FY2021/22) and by improved wage-bill management.”

via Tuko

The Risks We See and Those We Don’t: A Heads-Up to African Countries

“No serious debt sustainability analysis, and indeed no pre-emptive re-profiling of external debt, is possible without transparency concerning loan agreements,” writes Prof. Danny Leipziger.

via COVID-19 Africa Watch

Global Financing to End the Pandemic

“Such an unprecedented global undertaking requires strong cooperation, including financial support. Yet the urgency should be clear to all. As long as COVID-19 persists at high rates of transmission anywhere in the world, the pandemic will continue to disrupt global production, trade, and travel, and will also give rise to viral mutations that threaten to undermine previously acquired immunity from past infections and vaccinations.”

via Project Syndicate

Keys to African recovery: Vaccines, debt, and commodities

“Bold actions on governance by African countries will help reignite growth over the medium run. But to avoid a catastrophe in the short run, urgent action is needed by the international community on widening access to vaccines and debt relief.”

via Atlantic Council

Please keep your loans, Kenyans tell IMF

“According to an Infotrak study on Kenyans’ perception on foreign debt, 81 percent of Kenyans are angry, fearful or anxious because of the country’s ballooning debt, while 62 percent do not approve of regular borrowing from foreign sources. Meanwhile, 52 percent of Kenyans rate the government’s handling of its borrowed funds as poor, while 76 percent believe Kenya gets most of her foreign loans from China.”

via Daily Nation

IMF Approves KSh 257 Billion Financing Package Loan to Kenya

“Kenya’s debt remains sustainable, although it is at high risk of debt distress, according to the IMF.”

via Tuko