Nigeria’s finance minister said a debt relief agreement reached this week to help the world’s poorest countries deal with the coronavirus pandemic was a welcome first step but that middle-income countries with debt challenges also needed urgent help.
In remarks to be delivered at Friday’s meeting of the World Bank’s Development Committee, Zainab Ahmed said most countries in sub-Saharan African were particularly vulnerable to the pandemic because high rates of self-employment meant social distancing could not be sustained for long.
The African continent, which has some 400 million people living in poverty, also had weak health systems that were grossly inadequate to test for the COVID-19 respiratory disease caused by the coronavirus and manage those infected, she said.
Many African countries have also been hit by a slowdown in remittances from citizens living overseas, a sharp outflow of capital and a collapse in commodity prices. At the same time, export bans were causing shortages of medical supplies and food, she said.
The International Monetary Fund this week forecast that sub-Saharan Africa would see a 1.6% contraction in gross domestic product this year, because of the pandemic, and a host of other challenges.
Coronavirus cases in Africa could shoot up to 10 million within three to six months from thousands now, according to provisional modeling, a regional World Health Organization (WHO) official said on Thursday.
Ahmed, who also spoke on behalf of Angola and South Africa, supported a call by African leaders for $100 billion in aid for the continent to deal with the pandemic, with $44 billion earmarked for immediate debt relief.
She welcomed an agreement by the Group of 20 major economies (G20) and the Paris Club of official creditors to suspend debt payments for the poorest countries through the end of the year, and urged the Bank and other multilateral institutions to explore ways of participating in the debt relief initiative.
“Developing countries need all the assistance they can get to gain the fiscal space required to respond to this pandemic,” she said, adding that commercial creditors should also take part on comparable terms.
Ahmed also called on all creditors, working with the World Bank and IMF, to explore a “range of appropriate solutions” for middle-income countries that are also facing fiscal constraints and debt challenges.
“Urgent assistance to these countries is critical given the importance of their economies for the growth and development of their regions,” she said.