France Expects G-20 to Offer African Nations Debt Moratorium

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(Bloomberg) --

France expects Group of 20 nations will agree to a debt moratorium for African nations in a conference call later Wednesday, an official at the Elysee Palace said.

President Emmanuel Macron has been pushing for debt relief to support African nations caught up in the Covid-19 pandemic and on Monday called for a massive cancellation of the continent’s sovereign debt.

A moratorium would allow African countries “to take a breath and not pay interest,” Macron told Radio France Internationale in an interview released Wednesday. “We absolutely must help Africa to strengthen its ability to face the health shock.”

G-20 finance ministers and central bank governors will hold talks led by Saudi Arabia to discuss action to tackle the fallout from the coronavirus. Some African sovereigns may be at risk of defaulting on their liabilities unless they get help and private borrowers on the continent are also in acute distress as businesses are ravaged by the global slump.

Read More: What Africa’s Economies Need to Survive Coronavirus: Abiy Ahmed

The French official, who asked not to be identified in line with government rules, said that his country won’t raise the idea of canceling debts straight away and will instead initially propose moratoriums and restructuring. France is also calling for China to join efforts to tackle the issue of African debt, the official said. Last year, China agreed to restructure or partly write off debt in some African countries, including Republic of Congo and Cameroon.

A second official involved in organizing the call said that the French proposal is likely to be adopted. Agreeing to moratoriums would be easier than the full cancellation of African debts, the second official added.

Paris retains strong links to its former colonies in Africa and has about 4,500 troops based in countries such as Mali and Niger to fight a jihadist insurgency. France also backs the euro-peg of regional currencies in western and central Africa.

Any debt cancellations will be considered on a case-by-case basis and look at the claims of individual debt holders such as pension funds, the French official said.

(Updates with China debt restructuring in fifth paragraph)

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