By Tiri Masawi
Windhoek – SADC member states have benefited from close to US$1 trillion in emergency funding from the IMF, but observers say more holistic solutions are needed to sustainably deal with the immediate challenges posed by COVID-19 and the longer-term problem of the continent’s debt crisis.
Countries in the Southern African bloc that have benefited from IMF emergency facilities include the Comoros (US$12.13 million), the DRC (US$363.27 million), Madagascar (US$165.99 million), Malawi (US$91 million), Mozambique (US$309 million), Tanzania (US$14.3 million), and Seychelles (US$31.2 million).
Other SADC have accessed finding from the World Bank Group’s COVID-19 Fast-Track Facility, and these include Eswatini (US$6 million), Lesotho (US$7.5 million) and Malawi (US$37 million).
However, the Southern Africa Development Community Parliamentary Forum (SADC PF) and the African Forum and Network on Debt and Development (AFRODAD) say contracting more debt will only further undermine countries’ economies.
The two organisations have instead called on the IMF to issue Special Drawing Rights and to do so in an equitable manner, which will create liquidity without adding to the debt burden.
Further, SADC PF and AFRODAD are lobbying for a significant debt restructuring initiative that should end in complete debt relief.
At the first in a series of webinars by AFRODAD on the issue this week, SADC PF Chairperson Ms Boemo Sekgoma said, “During the 48th Plenary Assembly Session of the SADC Parliamentary Forum, a motion was adopted exhorting the regional body to support an initiative by speakers and heads of African national parliaments to call for total cancellation of the continent’s foreign debt.
“This is because many African countries are heavily indebted to industrialised countries and multinational bodies like the International Monetary Fund (IMF) and the World Bank. Today we again join in the discussion on the subject of public debt relief mechanisms amidst COVID-19 pandemic recovery efforts and Special Drawing Rights as option for economic recovery.
“The frequency of discussing the subject of public debt at various public Forums reveals the magnitude of the debt burden in Africa in general and in the SADC Region in particular.”
AFRODAD Senior Policy Officer Mr Tirivangani Mutazu said the main drivers of debt were new borrowing, budget deficits, exchange rate depreciations, the rise in interest rates, commodity price fluctuations and depressed FDI.