The G20 countries have suspended debt payment for the world’s poorest countries, most of which are in sub-Saharan Africa, to help them get through the economic impact of the coronavirus pandemic.
Finance ministers and central bank governors of the world’s largest economies agreed to freeze loan repayments until the end of this year as part of a plan to tackle the health and economic crises of the pandemic.
There is also a call to have private creditors participate in the initiative.
Some 76 countries will have their loans suspended, 40 of which are in sub-Saharan Africa – including Africa’s largest economy Nigeria, Kenya, Ethiopia, South Africa and small economies like Burundi, Liberia, and Zimbabwe.
Mohammed al- Jadaan, the finance minister of Saudi Arabia which is currently chairing the G20, said the debt assistance involved could be worth north of $20bn (£16bn).
Just last month, African finance ministers called for $100bn (£80bn) in immediate emergency economic stimulus including the waiver of debt interest payments.
For some African countries, the Covid-19 pandemic is ushering in liquidity concerns especially in oil reliant countries and commodity exporters who thrive on developed economies' demand.
Africa’s GDP is set to shrink this year by 1.6%, according to the International Monetary Fund, signalling the lowest growth for the region since 1970.
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