South African President and Chairperson of the African Union, Cyril Ramaphosa has called for a two-year standstill on all bilateral and multilateral debt.
Ramaphosa said that the African Union had engaged the G20 summit leaders as well as the World Bank and International Monetary Fund on the subject.
In addressing neighbouring heads of state Ramaphosa revealed they had requested a Special Drawing Rights Allocation to Africa.
An SDR allocation is a low-cost way of adding to IMF members’ international reserves, allowing them to reduce their reliance on more expensive domestic or external debt for building reserves.
We have addressed the virtual Summit of the G20 and a virtual joint meeting of the World Bank and IMF, where we called for, among other measures, the allocation of more Special Drawing Rights Allocations to Africa to provide much-needed liquidity to central banks, the corporate sector and SMEs,” Ramaphosa said on Friday 8 May 2020.
Ramaphosa said that the international community were positive about supporting global recovery, but the IMF and World Bank were currently only amenable to a nine-month debt standstill.
“In general, the response from the international community has been positive with various partners making pledges, offering debt relief measures and providing concrete support in the form of medical supplies.
Last month the G20 agreed to a debt service standstill on bilateral loans for a group of 76 low-income countries. Private creditors were not asked to participate in this debt standstill.