The World Bank Group and International Monetary Fund (IMF) convened African leaders, bilateral partners and multilateral institutions to spur faster action on Covid-19 response in African countries, as major institutions suspend debt repayments.
African Union chairperson and President of South Africa, Cyril Ramaphosa, warned: “This pandemic has already had a devastating impact on Africa and its effects will deepen as the rate of infection rises. It is a setback for the progress we have made to eradicate poverty, inequality and underdevelopment.
“While recent announcements from international partners are very welcome, large financing gaps remain and greater support is needed to ensure that African countries are able to respond effectively to the health crisis and address economic challenges.”
Together, official creditors have mobilised up to $57bn for Africa in 2020 alone – including upwards of $18bn each from the IMF and the World Bank each – to provide front-line health services, support the poor and vulnerable, and keep economies afloat in the face of the worst global economic downturn since the 1930s.
Private creditor support this year could amount to an estimated $13bn. This is an important start, but the continent needs an estimated $114bn in 2020 in its fight against Covid-19, leaving a financing gap of about $44bn, those meeting agreed.
The World Bank Group and the IMF suggested a range of financing options and policy tools as part of the pandemic response, many of which African countries are looking to implement as they plan for the medium- and long-term impacts of the crisis. These include further financing from official and private sector creditors.
IMF managing director Kristalina Georgieva said: “The pandemic is having a monumental impact across Africa and the IMF is leaning forward with many other partners to leverage our resources and to help save lives and livelihoods.”
She added: “The IMF will provide more concessional financing and we count on others to step up and do their part, to shield the economy and the people, and provide the foundations for a strong and sustainable recovery”.
It will also be critical for African countries to work together, especially on the health response and on limiting trade disruptions to ensure freer movement of medical and food supplies. With so many people working in informal jobs – 89% of workers in sub-Saharan Africa alone – countries need to take immediate steps to expand social safety net programmes and support workers and small enterprises.