Africa needs an immediate emergency economic stimulus to the tune of 100 billion dollars, owing to the COVID-19 outbreak, the African Finance Ministers have said.
This is contained in a statement by Communication and Media Relations Department of the group which explained that it was part of decision of the African Finance Ministers who met on March 19, in a virtual conference to exchange ideas on the efforts of their respective governments in dealing with the social and economic impacts of COVID-19.
The ministers said as such, the waiver of all interest payments, estimated at 44 billion dollars for 2020, and the possible extension of the waiver to the medium term, would provide immediate fiscal space and liquidity to the Governments in their efforts to respond to the COVID-19 pandemic.
According to them, the interest payments waiver should include not only interest payments on public debt, but also on sovereign bonds.
The ministers agreed on the need to consider waiving principal and interest and encourage the use of existing facilities in the World Bank, International Monetary Fund (IMF), African Development Bank (AfDB) and other regional institutions for the fragile states.
They underscored the need to support the private sector and protect about 30 million jobs at risk, particularly in the tourism and airline sectors across the continent.
In other critical sectors including agriculture, imports and exports, pharmaceuticals and in banking, the finance ministers agreed that all interest and principal payments on corporate debt, leases, extended credit facilities, refinancing schemes and guarantee facilities should be used to waive, restructure and provide additional liquidity in 2020.
They further said 1that a liquidity line should also be made available to the private sector to ensure the continuity of essential purchases and all SMEs that were dependent on trade could continue to function.
According to them, these measures, must accompany a policy of opening borders for trade and that Europe and the United States, in particular, can build this in as part of their stimulus to their private and financial systems.