The writer is Ghana’s minister for finance and outgoing chairman of the Development Committee of the IMF and World Bank
Ghana confirmed its first two Covid-19 cases on March 12, imports from Norway and Turkey. Africa has since recorded more than 1.5m cases and counting, though in terms of infections and deaths, we have fared better than most regions. Perhaps this is because of our youthful population, the natural social distancing of outdoor living and experience with infectious disease management — helped by good leadership.
Our economies, however, have not been spared. Across the continent, governments are facing falling revenues, rising expenditures, increasing debt distress, and significant reversals in development indicators. In an omen of what is to come, Zambia now appears headed for the continent’s first pandemic-related private debt default. The human costs are tremendous. Up to 39m people are expected to slip below the poverty line.
The past six months have brought laudable interventions from multilateral institutions and the G20 countries. The G20 moved quickly to establish a debt service suspension initiative, which has secured deferrals of some $5.3bn in debt service payments. The IMF has approved more than $25bn in emergency funding to Africa, and the World Bank fast track Covid-19 programme is providing $160bn.
As we approach the World Bank and IMF fall meetings this week, much more needs to be done. The IMF’s lending capacity should be doubled to $2.5tn. European countries have some $260bn in special drawing rights for which they have little use and could easily lend on to African countries. The US is opposing the issuance of new SDRs altogether.
Meanwhile, China is negotiating with Africa on a country-by-country rather than continental basis, which is blocking progress. That makes western creditors reluctant to offer concessions for fear that released resources will simply