Concessional loans ‘key to Africa’s recovery’

Access to loans on favourable terms will be crucial to Africa’s economic recovery from the Covid-19 pandemic, President Cyril Ramaphosa said on Saturday.

Ramaphosa, who is the outgoing chair of the African Union (AU), told the bloc’s summit that even though the International Monetary Fund (IMF) and the World Bank have deployed significant financial resources for the coronavirus outbreak response, more needed to be done for the African continent.

“Access to concessional finance will remain crucial as countries rebuild their economies,” Ramaphosa told the virtual summit.

“An injection of fresh resources by the IMF through reallocating and issuing new special drawing rights, with bias to the developing world, will correct the glaring inequality in fiscal stimulus measures between advanced economies and the rest of the world.”

Concessional loans generally offer terms that are more favourable to those available on the open market.

The precarious debt burdens of a number of African nations have worsened due to the economic fallout from the Covid-19 pandemic.

Among a population of 1.3 billion, Africa has so far reported more than 3.6 million coronavirus infections and over 94 000 deaths, according to a Reuters tally.

South Africa has recorded the most infections of any African nation.

While wealthier nations push ahead with mass vaccination drives, only a few African countries have started vaccination roll-out.

The 55-member AU hopes to see 60% of the continent’s population immunised in the next three years.

Ramaphosa said last week that the AU has so far secured one billion vaccines, of which 700 million will come from the global Covax facility, co-led by the World Health Organisation, and 300 million had been facilitated by the African Vaccine Acquisition Task Team. – Reuters