African public finance rescue package announced

14 Apr 20

A new $10bn fund has been announced by the African Development Bank to help the continent’s governments respond to the coronavirus pandemic.


Many African countries are already beginning to experience deep economic problems, despite currently having fewer cases of the virus than many European or Asian countries. Meanwhile, experts have warned that, with generally underprepared healthcare systems, a serious outbreak on the continent could prove financially disastrous.

“Africa is facing enormous fiscal challenges to respond to the coronavirus pandemic effectively,” said AfDB president Akinwumi Adesina, who added that the bank is deploying “its full weight of emergency response support” to deal with the crisis.

“We must protect lives,” he said. “This facility will help African countries to fast-track their efforts to contain the rapid spread of Covid-19.”

The facility comprises $5.5bn to be used by governments of AfDB member countries, $3.1bn for operations by state and regional governments under the African Development Fund – the bank’s arm for fragile countries – and $1.35bn for private sector operations.

“These are extraordinary times, and we must take bold and decisive actions to save and protect millions of lives in Africa,” Adesina said.

Sub-Saharan Africa faces the prospect of its first recession in 25 years as a result of the pandemic, and could need emergency stimulus of as much as $100bn (including $44bn of waivers on government interest payments), the World Bank has warned.

“Due to deteriorating fiscal positions and increased public debt, governments in the region do not have much wriggle room in deploying fiscal policy to address the crisis,” said Albert Zeufack, chief economist for Africa at the World Bank.

Zeufack recommended governments should redirect expenditure, which he said could be boosted by lenders providing debt relief, towards health systems – to increase capacity and equip medical personnel.

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