The COVID-19 (coronavirus) global pandemic has led to a sudden and sharp fall in global economic activity since early-2020. For developing economies, and African economies in particular, this has caused untold economic harm at the time when more financial resources are needed to fight the pandemic. The region’s revenues from some of the most important sources – tourism, commodity exports, and remittances – are at their lowest. Coupled with capital outflows, this has led to huge currency depreciations and an increase in debt service payments, pushing African countries into further risk of a debt crisis.
Africa’s financing gap is estimated at $100 billion. Thus, there have been calls, including by the African Union (AU), to help developing countries create some fiscal space. The International Monetary Fund responded by offering immediate debt service relief for 25 eligible low-income countries, mainly from Africa, through the Catastrophic Containment Relief Trust (CCRT). But this leaves out many countries in the region. There is a need to find more viable options to immediately plug the current financing gap. In this session, Dr. Ngozi Okonjo-Iweala, the African Union’s Special Envoy to Mobilize International Economic Support for Continental Fight Against COVID-19 and Albert Zeufack, Chief Economist of the World Bank Africa Region, will discuss how to find ways of creating the fiscal space and plugging the current financing gap in African countries during this pandemic.