March 27, 2020/United Capital Report

Recently, in a bid to provide relief to developing economies affected by the COVID-19 pandemic, the World Bank and International Monetary Fund (IMF) announced the suspension of debt repayments by the world’s poorest countries, under the International Development Association (IDA). Also, the two supranational agencies went a step further, by calling on other official bilateral creditors, to suspend debt payments from IDA countries that request forbearance (temporary postponement of debt payments).

For context, the World Bank, through the IDA and the International Bank for Reconstruction and Development (IBRD), is currently providing credits and loans to about 35 African countries. As at 31st Jan-2020, the original principal value of IBRD loans and IDA credits for select countries were: Nigeria ($11.5bn), Ghana ($4.0bn), Kenya ($8.5bn), Cote d’Ivoire ($3.5bn), Senegal ($2.9bn), Benin ($1.4bn), Burkina Faso ($2.0bn) and others.

No doubt, this action could not have come at a better time for African economies, as city lockdowns and restrictions, as well as the volatility in the price of key export commodities are expected to slow down economic activities and significantly drag government revenue generation. Also, this gives more room for fiscal and monetary resources to be directed at palliating the negative effects of the COVID-19 break, by promoting easy access to credit, liquidity and softer terms for businesses, fiscal stimulus, as well as developing critical healthcare infrastructure.

Top African Stories

• Coronavirus: IMF, World Bank suspend debt payments by Nigeria, others: The International Monetary Fund and World Bank on Wednesday announced plans to hold on debt payments from Nigeria and other sub-Saharan Africa nations so that they can battle the coronavirus pandemic. Read more
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• Kenyan MPs mull coronavirus pay cut: Members of parliament in Kenya are considering whether to follow the example of President Uhuru Kenyatta by accepting a temporary pay cut in response to coronavirus. Read more
• AfDB launches project to tackle electricity metering challenges in Cameroon: The African Development Bank and the multi-donor Fund for African Private Sector Assistance (FAPA) have joined the government of Cameroon to launch an initiative to bolster the deployment of electricity metering services in the country. Read more

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