Corona sinks OACP states into debt, economic hole
PANDEMIC: Debt burden and existing economic sanctions are worsening the Covid-19 pandemic shocks for low income and least developed countries (LDCs).
Speaking yesterday during a virtual summit of Heads of State and Government for countries that form the Organisation of the African, Carribean and Pacific States (OACPS) President Uhuru Kenyatta who hosted the forum in his capacity as the organisation’s President-in-Office said ongoing debt relief measures being rolled out by global lenders were a big relief.
However, he called for more interventions including debt cancellations, saying the debt of many OACP countries continues to rise into crisis levels.
“The debt of many member states continues to rise, 44 per cent of low income and least developed countries (LDCs) are in debt distress or assessed as being at high risk of external debt distress,” President Kenyatta said in a statement.
He warned that Covid-19 and related global economic shocks will exacerbate the problem for these nations which are already suffering.
According to the United Nations Development Programme (UNDP), the pandemic threatens to disproportionately devastate economies of already impoverished countries as they tackle a health crisis with very limited resources.
UNDP warned in a new report that while the socioeconomic impact on poor and developing countries will take years to recover from estimating that income losses in those countries are forecast to exceed $220 billion (Sh24 trillion), about half of all jobs in Africa could be lost.
French President Emmanuel Macron challenged global lending institutions asking them to go beyond current relief measures.
In his recorded address, Macron asked lenders to consider debt cancelation for the most vulnerable countries so as cushion them during this period. Norway premier Erna Solberg said the country supports the debt moratorium issued by multilateral lenders and assured OACP nations that her country will “remain a close partner throughout the crisis.”
Led by President Cyril Ramaphosa (South Africa) who is African Union chair, the OACPS leaders, who included Paul Kagame (Rwanda) and Edgar Lungu (Zambia), urged for the lifting of economic sanctions against Sudan and Zimbabwe.
They said the international community needs to lift the sanctions to enable the two nations to apply their resources in mitigating their populations from the adverse socioeconomic effects of the current health crisis. – Fred Aminga and PSCU