External publications

COVID-19: how can the G20 address debt distress in SSA?

Berensmann, Kathrin / Hopestone Kayiska Chavula / Austin Chiumia / Mma Amara Ekeruche / Njuguna Ndung'u / Aloysius Ordu / Lemma W. Senbet / Abebe Shimeles
External Publications (2021)

T20 Italy, Task Force 9 (International Finance), Policy Brief (September 2021)

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Since the pandemic began, the debt situation in Sub-Saharan Africa (SSA) has been further exacerbated as the pandemic has constrained the ability of many countries to mobilise revenues; it has also raised public  sector financing requirements. To close the financial gap, countries in SSA need short-term and long-term liquidity from a wide range of financiers. The G20 assumes a crucial role in resolving debt problems in SSA as the only forum that encompasses the governments of Africa’s most important creditors among industrialised countries and emerging markets. The G20 can help by: (a) operationalising, in the shortterm, the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI) and linking it to sustainable development; (b) supporting robust replenishments of the concessional windows of the International Development Association (IDA) and the African Development Fund (ADF) and a new allocation of Special Drawing Rights (SDRs) for low-income countries (LICs); (c) enhancing capacity building for domestic resource mobilisation in LICs through the development of financial sectors and public financial management; and (d) developing a set of critical indicators for CRAs that can easily be compared across countries and can stand the test of time and changing risk profiles.