Coronavirus has had a negative impact on the African continent and has left them in need of debt forgiveness. Many African countries are now indebted, and they are in distress. In 2021, public debt will be of great concern for many African countries.
The year 2020 will be remembered for the Covid-19 pandemic outbreak. Analysts have observed that many African countries have handled the pandemic well compared to other continents. It is estimated that 55,000 have so far died of the pandemic and 2 million others have recovered from the pandemic for a continent with a population slightly over 1 billion.
African Centers of Disease Control among other actors took swift action to contain the pandemic. These efforts were made successful considering that Africa has a youthful population and there are quite few homes for the elderly. Climate too is said to have played a role. Africa has had previous experience dealing with pandemics such as Ebola. So the continent was well prepared for this new pandemic.
In April, 2020 the development committee at World Bank and the finance ministers of the G20 countries endorsed the Debt Service suspension Initiative (DSSI). At least 40 African countries which are among the least developed benefit from that arrangement. However, this initiative did not reduce the amount of debt, it only suspended repayments to 30 June 2021 and beyond.
China as a key lender to African states has refused to disclose all its loans. Some analysts call this a Chinese debt-trap strategy in Africa.
The year 2021, Africa will be slowly recovering economically. However, there will be increased unemployment alongside bulging debts. Some of the African countries will struggle along. For instance, Zambia recently became the first sovereign debt defaulter.
Nearly all African countries depend on export of raw materials which exposes them to deby sustainability.
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