HomeNewsCOVID-19 has sunk Africa in debt: WB

COVID-19 has sunk Africa in debt: WB

BY MIRIAM MAGWAYA

THE World Bank (WB) Group has said African governments, Zimbabwe included are mired in debt after spending part of their budgets towards combating the COVID-19 pandemic.

This was said by WB Group vice-president and chief economist, Carmen Reinhart on Monday while addressing the plenary session of the African Economic Research Consortium (AERC) biannual research workshop.

Reinhart said the pandemic had forced various governments across the continent to borrow to capacitate themselves in implementing support programmes for adversely affected households, and financing operations in the health sector.

“The COVID-19 pandemic has exacerbated the challenges that existed before the pandemic, worsening the debt situation even further. The need to spend more on public health and social safety nets programmes coupled with a slowdown in economic activities are all exerting considerable pressure on government finances,” Reinhart said.

“Several governments across the continent are forced to run wide fiscal deficits that are slowly translating into increasing debt and debt distress. COVID-19 has been an exceptionally regressive crisis. It is regressive within countries and regressive across countries.”

She urged the African governments to think of other revenue mobilisation strategies that will bail out the economies from debts.

AERC executive director Njuguna Ndung’u said the negative effects of the COVID-19 pandemic were visible in all the African regions, but the most affected countries were in southern and western Africa.

“Some African countries have fared better than others depending on their initial conditions. There is an opportunity to institute strong social protection programmes in Africa to ensure support for the poorest and cushion against those marginalised from future negative shocks- but dependent on fiscal space.”

He said during the pandemic, African economies borrowed from the African Development Bank, World Bank and the International Monetary Fund, for COVID-19 management bailout.

Zimbabwe struggled to provide social safety nets to vulnerable communities during the COVID-19 lockdown period.

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