China must do more to help ease the debt burden of African countries facing economic calamity due to the coronavirus pandemic, Ghana’s finance minister has said.
Africa accounts for just a fraction of global cases of the disease, but its countries are already feeling the impact – with the continent’s economies expected to contract, putting about 20 million jobs at risk.
“My feeling is that China has to come on stronger,” Ken Ofori-Atta said during a conversation last week Monday with Masood Ahmed, president of the Washington-based Centre for Global Development (CGD), that was posted on the think-tank’s website.
“African debt to China is US$145billion or so, over US$8billion of payments is required this year… So that needs to be looked at.”
African governments are calling for US$100billion in assistance, including support for a moratorium on all external debt and eventually some debt write-offs.
Experts say any effort to pause debt servicing or extend more comprehensive debt relief to developing countries will struggle without China taking on a key role in the process.
China on Tuesday said that it recognises developing countries faced a greater challenge, but it did not mention any specific debt-relief measures it would implement.
Foreign ministry spokesman Zhao Lijian said China will communicate with the relevant countries through diplomatic channels.
“For countries facing debt difficulties China will never force them, but will resolve it through consultation via bilateral channels,” he said at a daily press briefing.
The International Monetary Fund (IMF) and World Bank are mobilising resources to support economies reeling from the pandemic. But they are also calling for wealthy nations to suspend payments on bilateral debt owed by poor countries.
“For official bilateral creditors, including China – which is the largest creditor to many of these countries, this is the quickest and most effective way to do their share,” the CGD’s Ahmed told Reuters separately on Tuesday.
Ofori-Atta currently chairs the Development Committee, a ministerial-level forum that advises the World Bank and IMF on development issues. The two U.S.-based multilaterals will hold virtual annual spring meetings later this month.
Ofori-Atta said African countries are also seeking ways to increase their special drawing rights (SDR), foreign exchange reserves managed by the IMF, to shield against commercial debt defaults.
“This should not happen,” he said. “So we should find a way to increase SDRs, or for the Europeans to offer their SDRs as a way out.”