Addressing members of the African Union (AU) on development financing for developing countries in the era of Covid-19, chairperson and South African President Cyril Ramaphosa said Africa was encouraged by the collaboration of the Group of 20 economies, the Bretton Woods institutions and the United Nations (UN) towards finding solutions to developing countries' debt sustainability and related issues.
In this regard, he said South Africa supported the call of the AU for a debt standstill for two years.
“Further, we support the allocation of more International Monetary Fund Special Drawing Rights to help central banks, the corporate sector and small and medium-sized businesses to withstand the shocks caused by the pandemic.”
Ramaphosa noted that while the Covid-19 pandemic would have far-reaching impacts on human health, livelihoods, security, economic development and social stability, it was also important to continue to strive to meet the UN’s Sustainable Development Goals (SDGs) which virus placed under threat.
“This is particularly the case for developing countries.”
As world leaders mounted an international effort to overcome the Covid-19 crisis, he stressed the need to ensure that the progress made by AU member States towards the realisation of the SDGs should not be reversed.
In particular, Ramaphosa called on developed countries to meet their commitments to support developing countries in the key areas of the Addis Ababa Action Agenda.
“In this time of crisis, we need to be innovative in the deployment of resources to both fight Covid-19 and support sustainable development. In this regard, developing country debt is a foremost concern.”
Further, he noted the endorsement of the call by UN secretary-general AntoĢnio Guterres for the development of a comprehensive debt framework.
This should start with an across-the-board debt standstill for countries unable to service their debts, Ramaphosa noted, adding that this should be followed by targeted debt relief and a comprehensive approach to structural issues in the international debt architecture to prevent defaults.
“We further welcome Guterres’s call for an international response package amounting to at least 10% of the world’s gross domestic product. The means more than $200-billion of additional support for Africa.”
In addition, the AU was also asked by Ramaphosa to address the threat posed to the economic stability of developing countries by illicit financial flows, money laundering and corruption.
“We share a collective responsibility to not just uplift our respective countries and societies, but also those less resourced and less fortunate. No one should be left behind,” he stated.