Canada pushes for African debt relief to ward off COVID-19 economic crisis

By Mike Blanchfield | The Canadian Press

Canada’s development minister says the government is pushing international actors to provide debt relief in Africa and other less-developed regions to help fight threats of hunger, economic ruin and terrorism from COVID-19. Karina Gould tells The Canadian Press the number of COVID-19 cases in Africa is rising, which is worrying because the continent doesn’t have the safety net to ward off an impending socioeconomic crisis that would accompany a health emergency.

Gould says the pandemic has hit 53 of Africa’s 54 countries, and while some workers in those countries were doing OK prior to the onset of COVID-19, many are losing work with no prospect of help from their governments.

Gould says she is part of broader government effort that is advocating for help in a variety of global forums, including the G7, G20 and the world’s leading financial bodies.

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She says Prime Minister Justin Trudeau, Finance Minister Bill Morneau, Foreign Affairs Minister Francois-Philippe Champagne and Canada’s UN ambassador, Marc-Andre Blanchard, are involved in the effort.


Past Liberal governments have pushed for debt relief at the turn of the century, a measure that allows the World Bank and the International Monetary Fund the ability to ease the burden of the repayments owed by poor countries.RELATED STORIES:Trudeau warns premature reopening could send Canada ‘back into confinement’Trudeau warns premature reopening could send Canada ‘back into confinement’South Africa’s Ramaphosa says Africa needs two-year debt standstill

“Canada is very active within G7 and G20 circles and within the Paris Club in promoting the needs of low-income countries, particularly when it comes to debt relief,” Gould said in an interview Friday. The Paris Club is an informal intergovernmental group with a rotating membership that serves as a forum for creditors to restructure debt.

On Thursday, the UN increased its global appeal to fight the pandemic from US$2 billion to US$6.7 billion, as the humanitarian chief Mark Lowcock said it could take another three to six months for it to peak in the world’s poorest countries.

“We’ll be analyzing that, and Canada will absolutely be responding,” Gould said, adding that she would be speaking to Lowcock on Friday to get further details.

“It’s not just about the supply chain. It’s about people who were doing OK, but they live in countries where they don’t have social safety nets,” said Gould. “One of the real worrisome trends is the increase in hunger, the malnutrition crisis, but also what this means for non-state actors or terrorist groups who may be preying on this vulnerability.”

Gould was referring to a recent report that militants in West Africa’s Sahel belt were exploiting the pandemic to recruit new followers.

One month ago, Canada announced an additional $159 million in foreign aid spending in relation to the pandemic, but Gould stressed was just an initial response.

Ethiopian Prime Minister Abiy Ahmed argued this week for swift debt relief. In a column published by the World Economic Forum, he lamented the “huge disconnect between the rhetoric of rich-country leaders” and the support they are giving poor countries.

“Indeed, until last week, African countries were spending more on debt payments than on health care,” he wrote.

“Such low levels of spending make it impossible to fund acute-care hospital beds, ventilators, and the drugs needed to confront diseases like COVID-19.

“Paying for doctors, nurses, X-ray technicians, and other health professionals, together with their equipment, can seem almost like a luxury.”

Trudeau visited Ethiopia in January and pledged greater co-operation with African Union nations.

On March 23, Trudeau spoke to Abiy after the outbreak was fully underway, and they “agreed on the importance of reinforcing health, financial, and economic systems in the region,” his office said at the time.

On Friday, Trudeau spoke with Ghana President Nana Addo Dankwa Akufo-Addo about the need to keep supply chains open to prevent food insecurity and allow access to medical supplies.

“They also agreed on the need for international co-ordination to fight the disease and restore economic activity around the world, and discussed measures needed to support health and economic systems in Africa,” said a statement from the Prime Minister’s Office.

The pressure to grant debt relief also extends to other regions, notably Caribbean countries that have seen tourism — the main driver of many of their economies — dry up because of COVID-19’s travel restrictions, said Gould.

Canada has also been advocating for countries “that don’t typically meet the threshold for the World Bank and the International Monetary Fund.”

That has extended to Asia, where Pakistan Prime Minister Imran Khan thanked Trudeau in a telephone call this past for Canada’s support in having his country included in G20 debt relief measures.

This report by The Canadian Press was first published May 8, 2020.

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