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African finance ministers, along with the International Monetary Fund and World Bank, have called for a suspension of debt service interest payments for the world’s poorest countries to help weather the coronavirus crisis.

Many of these are in Africa, where interest on debt is expected to cost governments $44 billion this year – part of a worsening credit crisis following years of unsustainable borrowing.

The appeal comes just 15 years after the G8 wrote off billions in developing country debt in 2005. It’s a regrettable case of déjà vu for African economies, following close to two decades of high growth and investment that governments have largely failed to turn into meaningful economic development.

It’s also likely to fall on deaf ears.

The US has already warned that it is not sympathetic to the idea of a new round of debt relief, noting that it hasn’t been long since the last time.

The coronavirus crisis – which the IMF has warned will wreak havoc on Africa’s already cash-strapped economies – may soften this line, but securing anything other than short-term measures from donor governments is unlikely.

Even harder will be getting sympathy from commercial creditors. In contrast to 2005, when the issue was public debt, 32% of total external debt and 55% of external debt service payments – the main source of concern – are estimated to be commercial.

Debt relief won’t fix Africa’s credit problem this time.

This report reflects the views of the author alone, not those of How we made it in Africa.

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The week’s picks

From the continent

Tunisia has started negotiations for a new loan program with the International Monetary Fund, in addition to a $2.8 billion loan agreed in 2016. The North African economy has struggled to boost growth and economic development since the Arab Spring. More: Reuters

The African Development Bank has issued a $3 billion bond to help counter the coronavirus crisis. This follows an earlier announcement by the African Export-Import Bank of a $3 billion facility to help cushion the blow. More: Nasdaq

The global perspective

The IMF and World Bank have agreed to provide debt relief to Somalia under the Heavily Indebted Poor Countries (HIPC). The move is an important milestone for the country, which comes amid tentative reforms following decades of chronic conflict. More: IMF

Growth across Africa will be ‘hit hard’ in 2020 from the economic fallout of the coronavirus, the International Monetary Fund warned this week, likely coming in well below the 3.2% forecast in October. According to the lender, over 20 countries on the continent have already asked for emergency funding, with at least another 10 expected to do so. More: Reuters

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