COVID-19

Abiy proposes Sh15trn budgetary support for Africa, loan write-offs

Says economies are fragile and vulnerable even in the best of times, will face serious shocks following this crisis.

In Summary

• Prime Minister Abiy Ahmed said a $150 billion budgetary support should be allocated to mitigate the socioeconomic challenges posed by the Corona pandemic on African countries.

• Being cognizant of the fact that this global pandemic(CVID-19) requires a global approach and strategy to stop it, the government of Ethiopia, working closely with other African countries has proposed key areas to be considered in the upcoming Extraordinary G:20 Leaders’ Summit,” Abiy said.

Fight, not flight, must be the strategy against corona
Fight, not flight, must be the strategy against corona
Image: OZONE

Ethiopia now says the upcoming Extraordinary G20 Leaders Summit should urgently consider an Africa Global Covid-19 Emergency package.

Prime Minister Abiy Ahmed said $150 billion (Sh15 trillion) budgetary support should be allocated to mitigate the socioeconomic challenges posed by the coronavirus pandemic on African countries.

"Being cognisant of the fact that this global pandemic (COVID-19) requires a global approach and strategy to stop it, the government of Ethiopia, working closely with other African countries has proposed key areas to be considered in the upcoming Extraordinary G20 Leaders’ Summit,” Abiy said on Tuesday.

Abiy said the COVID-19 poses an existential threat to the economies of African countries.

"Our economies are fragile and vulnerable even in the best of times, will face serious shocks following this crisis," the PM said.

He added, "A dramatic decline in exports, disruption of global chains and the sudden drying up of travel and tourism have already wreaked havoc to many economies".

He said Africa's ability to take even modest measures to inject liquidity and cushion its companies and workers from the impact of this calamity are further constrained by th heavy debt burden, the servicing of which alone costs many of them significantly more than their annual health budgets.

"These challenges cannot be adequately addressed by policies and measures taken individually by any one country or group of countries, they require a globally coordinated response just as the virus knows no borders, our responses should also know no borders," he said.

He said a supplementary budget support from the World Bank Group should be looked at for health emergency support to boost foreign exchange reserves and safety nets.

He said IMF Global Crisis Financing to low income countries to meet urgent balance of payment needs to be made.

With regards to a Global Africa Health Emergency Package, Abiy said this should include support to WHO to strengthen public health delivery and emergency preparedness in Africa and support to Africa CDC to help supply medical equipment, protective gears and testing kits.

"Financing by the Global Fund to strengthen system for health services and support health equipment purchases in Africa,' he said.

The last area Ethiopia wants Summit to consider is the Debt Resolution and Restructuring package which will follow the example of previous successful debt relief efforts.

"Ethiopia proposes all interest payment to government loans should be written off and in addition part of the debt of low income countries should be written off," the PM said.

He said the remaining debt should be converted into long-term low interest loans with 10 years grace period before payment.

Abiy said all debt repayment should be limited to 10 per cent of the value of exports.

So far 43 African countries have reported 1,872 COVID-19 cases with 50 deaths.

Kenya reported its first case on March 13 and now has 16 cases.

East African Community has 73 cases with Rwanda leading with 36 cases.

South Sudan and Burundi are yet to report any cases.