By Spy Uganda
The President of Uganda His Excellency Yoweri Kaguta Museveni has urged the World Bank, International Monetary Fund (IMF) and lending organisations in Asia to consider cancellation of Africa’s £230Bn sovereign debt in order to free up cash for to fight against the virus fight.
Museveni told United Nations (UN) delegates on Thursday that the multilateral and bilateral loans should be cancelled ‘because this problem has been created for Africa by Asia’
He told United Nations delegates that only total debt forgiveness would prove that the world was interested in helping Africa fight a disease that was not of its own making.
“The external friends, if they are friends at all, should cancel all the multilateral and bilateral loans because this problem has been created for Africa by Asia,” he said.
Although Western states and financial institutions like the International Monetary Fund (IMF) and the World Bank have written off large portions of debt owed by Africa’s poorest states in the past, a full cancellation would be unprecedented. The continent’s total sovereign debt burden has since soared to a record high of £230bn this year.
Museveni’s demand appeared to be aimed primarily at China, which has fueled much of Africa’s recent debt binge.
Although Western states, the IMF and World Bank have taken steps to relieve some of Africa’s debt burden, China has remained silent on the prospect of cancelling loans owed to Beijing by African states.
China is believed to hold more than a third of the continent’s sovereign debt, reportedly lending African states more than £90bn to fund big infrastructure projects.
Although Africa desperately needs to develop its infrastructure, China has been criticized for the opacity of its lending agreements. Even the amount lent is kept secret, leaving academics to estimate the true totals.
African ministers say China has told their governments that debt relief would only be granted if they surrendered stakes in important state assets to Beijing, in line with provisions in the lending deals. This has led to worries that strategic ports, airports and mines in Africa could fall under Chinese control.
Zambia has threatened to seize a large copper mine from the British company Glencore and hand it over to China in order to secure debt relief.
The G20, which groups together the world’s richest states and includes China, has agreed to suspend collection of debt from the world’s 75 poorest countries until the end of the year, giving many African governments some breathing space.
But it is unclear to what degree this affects the estimated £6.5bn African states must pay Beijing by the end of December.
The suspension of debt repayment has only provided modest relief. African finance ministers say they need £80bn to finance the measures needed to halt the spread of Covid-19 on the continent.
Africa has so far been spared the full force of the pandemic, recording 51,734 confirmed cases and 1,954 deaths so far — but lockdowns, a steep decline in oil and commodity prices and a collapse in tourism are likely to take a heavy toll on the continent’s economy.
Britain lends comparatively little to Africa, mainly because most of its assistance comes in aid rather than loans. The UK is the continent’s second biggest bilateral donor.
