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. (https://pawnandjewelry.com/)
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.
