OXFAM, a confederation of 19 independent charitable organisations focused on the alleviation of global poverty, has called on the Group of Twenty (G20) leaders to consider debt moratorium for African countries, who it stated are unable to afford debt repayment given the COVID-19 crisis.
The G20 is an international forum for the governments and central bank governors from 19 countries and the European Union.
In a statement released on Thursday, and sighted by The ICIR, Oxfam, welcomed the decision of G20 leaders to hold a virtual Extra-Ordinary Summit to respond to the health crisis and economic recession triggered by Covid 19, and called on it to consider a universal debt suspension.
Oxfam submitted that Africa is facing the worst health and economic crisis in decades following the impact of coronavirus pandemic.
It said that the slump in commodity prices and disruption of global supply chains is hitting the continent the hardest and for which suspending debt repayment will enable the country free up resources to tackle COVID-19.
“This is the moment that Africa needs to use all its existing resources to cope with the emergency. It makes no sense for African countries to transfer much-needed resources to foreign banks, developed nations with capacity to cope with the pandemic, or international institutions,” said Peter Kamalingin, Oxfam Pan Africa Director.
The nonprofit group also commended the calls for debt relief by the World Bank (WB) and International Monetary Fund (IMF) but highlighted it as only a first step.
In its statement, it argued that such implementation doesn’t serve the needs of the African people who need to focus on strengthening their public health systems to adequately respond to the COVID-19, as well as provide social protection for its most vulnerable groups.
Oxfam urged the G20 leaders to consider giving Africa a fighting chance in this ‘life-threatening crisis,’by suspending debt repayments.
“Decisions need to be taken now, any delay only serves to worsen the already fragile situation and make the recovery process more expensive. Debt relief free from conditionalities is the best way to leave money in the hands of African governments to make decisions now,” submitted Kamalingin.
Meanwhile, Standard & Poor’s global ratings release shows that Nigeria’s sovereign credit rating has sunk to ‘B-’ due to crashing international oil prices, following lower oil demand tied to the coronavirus pandemic.
According to the report, the Federal Government policy responses are unlikely to be effective enough to reduce the effect of lower oil prices which is already hurting Nigeria’s external and fiscal positions, and putting further pressure on the foreign exchange reserve.
Seun Durojaiye is a journalist with International Center for Investigative Reporting (ICIR).