African Development Bank Group (AfDB) President, Akinwumi Adesina, several heads of state and government, the United Nations, as well as heads of multilateral development finance institutions, have called for expansion of the Debt Service Suspension Initiative (DSSI), under which low-income countries have suspended paying down debt during the COVID-19.
Speaking during a virtual meeting convened by UN Secretary-General, António Guterres, Prime Minister Justin Trudeau of Canada and Prime Minister Andrew Holness of Jamaica, they said the initiative should be widened beyond lowincome countries and its current expiration extended to offer muchneeded fiscal space. They also called for Special Drawing Rights (SDR) to be reallocated to poorer countries.
In his remarks, Adesina said Africa’s economic recovery would hinge on securing equitable access to vaccines and developing solutions for debt distress. “Africa needs debt relief, debt restructuring and debt sustainability,” he said, pointing out that in the absence of reallocations, low-income countries would receive only about 3.2 per cent of special drawing rights.
The AfDB president called for the formation of an African financial stability mechanism, modeled on the European Stability Mechanism,to provide jointly guaranteed emergency support. “The mechanism will provide a much-needed fiscal safety net for African economies and help to avoid regional spillover effects of countries falling into illiquidity and insolvency,” he said.