Spending related to Covid-19 to push African governments towards debt relief
The enforcement of curfews and partial or complete lockdowns to flatten the Covid-19 infection curve will contribute to the African economy’s inevitable contraction this year. The debt burden will worsen to risk a wave of forced debt restructuring unless agreements can be reached on debt holidays and waivers. There are also growing concerns that a mere freeze in debt servicing will not be adequate, as several sovereign credit principal repayments are due over the 2020-22 period, and rolling over such a large amount of credit would be a challenge in a difficult global financial environment.