African countries require a two-year debt standstill to provide governments with the fiscal space to fight the coronavirus pandemic, according to South African President Cyril Ramaphosa.
The continent needs an immediate emergency economic stimulus of US$100B to combat the impact of the disease and almost half of that could come from waiving interest payments, according to the United Nations Economic Commission for Africa.
“While the World Bank and the International Monetary Fund have supported a debt standstill for nine months, we believe that — given the extent of the anticipated damage — we will need a debt standstill for two years,” said Ramaphosa.
The South African leader, who chairs the African Union, made the comment in a meeting with the heads of state of neighboring countries, according to a statement published on the Presidency website Friday.
African finance ministers are discussing debt-relief proposals, including a special-purpose vehicle to exchange their sovereign debt for new concessional paper to avoid having to use funds needed to battle the virus to pay private creditors.