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The G20 initiative to suspend debt services between June and December 2020 divided the continent into two parts: those who subscribed to it, 23 and those who declined to 13. The former believe that the measure assessed globally at $ 12.1 billion is not sufficiently attractive from a financial point of view and exposes them to a depreciation of their ratings. The second ones endorse the African proverb which says that “fish caught with the hand is safer than fish under the foot” and sign.
13 countries have not subscribed
For example, the Nigeria has renounced to sign, depriving itself of 107 million dollars equivalent to less than 0.1% of its GDP. In civil war since 1992, the Somalia declined the G20 offer. Another country that did not subscribe to the measure, the South Sudan, independent since 2011 and where the World Bank indicates no parameter for assessing the rating. The Guinea Bissau and the Liberia also declined the offer, which would have brought them only 0.1% of their GDP, or $ 900,000 and $ 1.8 million, respectively. The Rwanda and its moderate-risk debt profile is in the same situation, giving up a measure that would have earned it only $ 12.6 million, or 0.1% of GDP. The Benign also declined the operation which would have made him earn $ 13 million or 0.1% of his GDP. Refusal also noted at Burundi, which would have given up 0.1% of its GDP, the equivalent of $ 3.9 million.
The impact of the G20 initiative is just as limited for Madagascar which declined the initiative estimated at 0.2% of its GDP, or 24 million dollars. Ditto for the lesotho who did not sign the initiative, turning its back on an impact of $ 9.5 million for 0.3% of GDP. Or the same level as theUganda, another non-signatory country, which is giving up 0.3% of GDP or $ 95.6 million. Also refractory, the Kenya thus renounces measures valued at $ 800 million or 0.8% of its GDP.
23 countries have signed
For their part, the countries that have subscribed to the G20 initiative have made the reverse calculation, by taking immediate measures even if it means having to bear a depreciation of their respective financial ratings. So the Burkina Faso subscribed to the initiative, saving $ 23.3 million or 0.2% of its GDP. Same relative impact (0.2%) of Malawi which secures $ 17.1 million or the Sierra Leone where the impact does not exceed $ 7 million. In the same level, the Ground floor secures 0.2% of its GDP for an impact estimated at 104 million dollars. For its part, the Tanzania who signed reduced his GDP by 0.2% for $ 148 million. The Central africa and the Niger subscribed for 0.3% of their GDP with impacts of $ 6.3 million and $ 25.8 million respectively. The sTAY get 0.3% of their GDP or $ 2.3 million. The Mali also sees the measure impact its GDP by 0.3% for 52.3 million dollars. Other country having subscribed to the initiative, the Chad which obtains a reduction of 61 million dollars or 0.5% of its GDP. A similar impact as that of the Ivory Coast, with a moderate profile, with 0.5% of GDP equivalent to $ 231 million. Or the Senegal which benefits from an impact of 131 million dollars representing 0.5% of the GDP.
The Togo which has a high overall debt level is in the same impact level (0.5%) for a reduction of 25.8 million dollars. Classified in the category of high risk countries, the Ghana saving 368.8 million for 0.5% of its GDP. The Zambia subscribed to the program for $ 142.6 million or 0.6% of GDP. The Guinea relieves its economy for the equivalent of 1% of its GDP representing 126, 1 million dollars. TheEthiopia saves 0.6% of its GDP for $ 570 million. The Cape Verde savings 0.7% of its GDP, or $ 14.9 million. Cameroon has an impact of $ 276 million or 0.7% of its GDP. Same level as that garnered by the Gambia, country in high debt that pushes a sigh of relief for 11.5 million dollars or 0.7% of GDP.
The only country in the Central Africa region in debt distress according to the World Bank, the Congo gets $ 146.2 million equivalent to 1.3% of its GDP. Also at high risk of debt, the Mauritania benefits from $ 90 million, or 1.6% of its GDP. The Mozambique classified “in situation of over-indebtedness” garners the equivalent of 1.9% to 292 million dollars. Countries at high debt risk, Djibouti saves 2.5% of its GDP for the equivalent of $ 59.2 million. The impact of the G20 initiative onAngola, estimated at 3.7% of GDP, is $ 3.4 billion, estimates the World Bank in a new report.
As a reminder, in April 2020, the Development Committee, a joint body of the World Bank and the International Monetary Fund (IMF), and the G20 Finance Ministers validated the establishment of the Initiative to suspend the debt service, following the World Bank and IMF appeal for the poorest countries, to help them cope with the dire consequences of the COVID-19 (coronavirus) pandemic. The appeal, which calls for broad and equitable participation, urges all bilateral public creditors to act quickly to allow low-income countries to focus their resources on fighting the pandemic. The G20 also called on all private creditors to participate in this process on a comparable basis, a short sentence that alerted the rating agencies, which have been fairly conservative since with regard to the revaluation of credit ratings.
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