Moratorium on debt for Africa? Be careful of unintended consequences
In a piece for The Conversation, Professor Rodrigo Olivares-Caminal argues that a blanket moratorium on debt for Africa risks costing African countries much of the hard won gains many have achieved over the past 15 years
Africa is home to 41 of the International Monetary Fund's 59 Low Income Countries, writes Rodrigo Olivares-Caminal, Professor of Banking and Finance Law at Queen Mary University of London, in this article for The Conversation. These are more structurally vulnerable to external shocks such as Covid-19. The pandemic is affecting economies as governments implement increasingly aggressive lockdown procedures to stem the rate of the spread of the virus. It is also taking a toll on key commodity sectors and tourism, which are significant revenue earners for many countries across the region. The economic impact of Covid-19 has sparked calls from various stakeholders for a blanket moratorium on all debt service due to African creditors. If the debt suspension initiative is applied as a general blanket solution, it risks costing African countries much of the hard won gains many have achieved over the past 15 years.
- Professor Olivares-Caminal is also Co-Director of Queen Mary's Institute of Global Law, Economics and Finance (IGLEF)
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