The Director-General of the West African Institute for Financial and Economic Management (WAIFEM), Dr. Baba Musa has advised multilateral institutions and regional development banks to convert the loans they had provided African countries and other emerging economies to grants.
Speaking during a session titled: “Defusing Debt – Creating Comprehensive Solutions,” at the ongoing 2020 virtual Annual Meeting of the International Monetary Fund (IMF) and the World Bank, Musa said this would help cushion the impact of the Covid-19 on economies in the region.
According to him, poor African countries do not have the means to launch the massive stimulus packages that had been seen in the developed economies.
The WAIFEM boss explained: “Debt management matters right now because developing and emerging economies are facing new financial vulnerabilities and increased risk of them being distressed because of the Covid-19 pandemic.”
He pointed out that the pandemic had triggered health, social and economic crisis, saying that the fiscal pressures exerted by the containment measures of the pandemic has ruined public finances and debt sustainability situation of countries in Africa, moving them from moderate risk, to high risk and then distressed.
“To avoid crisis and minimise negative effects of the pandemic shocks, it is necessary that multilateral institutions and regional development banks convert the loans provided to grants and persuade the private sector to do same,” he added.