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COVID’s Aftershocks in Africa: Janet Yellen’s welcomed signal


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Debt donut: ONE’s new debt donut shows that 80% debt service payments from poorer countries have not been suspended, despite warm words from the G20. In 2021, we expect countries eligible for the Debt Service Suspension Initiative will have $6.8 billion of payments rescheduled until later. But they will still have to pay $36.1 billion to bilateral creditors, multilateral institutions, and private creditors this year. African countries eligible for relief will still have to pay $19.8 billion. G20 finance ministers should extend the DSSI when they meet this week.

Schooling ain’t learning: New research from the World Bank shows two-thirds of poorer countries have cut their education budgets since COVID-19 began. ONE analysis, based on pre-COVID data, shows a quarter of African countries spend more on debt service than on education.

Yellen from the rooftops: Ahead of the G20 finance ministers meeting on Friday, US Treasury Secretary Janet Yellen wrote to her colleagues with the strongest signal yet that the US backs going big on a stimulus package for the poorest countries. We are delighted, but this needs to be converted into swift action. ONE’s finance expert Sara Harcourt lays out what’s at stake and what Fin Mins should do. Eminent leaders like Trevor Manuel and Donald Kaberuka have laid out a detailed action plan.

Thicker than water: New data shows Kenyans have seen a 75% increase in support from relatives in North America while remittances from Europe have fallen significantly. Chris Orwa writes for ONE’s COVID Tracker on the impacts of the pandemic in Kenya. Despite families stepping up, the weakness of the Kenyan shilling has led to the largest hike in fuel prices in over a decade; something that has hit people living in poor urban areas hardest: 70% rely on kerosene for lighting and energy. A new survey showed 51% of households struggle to get enough food to eat daily.

9 points behind: By the end of 2022, cumulative per capita income will be 18% behind pre-crisis levels for low-income countries and 22% for emerging and developing countries, excluding China. So said IMF Chief Kristalina Georgieva, who highlighted how developing economies will languish for years to come. (The figure for rich countries is 13%). She calls for a new allocation of Special Drawing Rights (SDRs) and a comprehensive approach to debt.

Buffers wearing thin: Africa’s economic buffers are thinner than they were pre-pandemic. It is in the self-interest of rich countries to back the creation of at least $500 billion in SDRs at the IMF and transfer what they don’t need to poorer countries, writes UN Economic Commission for Africa Chief Vera Songwe in the Financial Times. Our partners at the Center for Global Development lay out what this transfer could mean for poorer countries while the IMF’s John Lipsky answers the critics in the Wall Street Journal.

COVAX acts: The first shipment of COVAX vaccines arrived in Ghana on Wednesday. 600,000 AstraZeneca doses arrived in Accra directly from the Serum Institute’s factory in Pune, India. Further deliveries to Abidjan, Côte d’Ivoire, are due this week.

Not so great: While French President Macron called for the EU and the US to allocate 5% of their current vaccine supplies to urgently vaccinate healthcare workers in Africa, Prime Minister Johnson’s big announcement last week that the UK would share doses was not great on the detail — lawmakers can’t get to the bottom of whether Great Britain is simply going to sell what it does not need to poorer countries after vaccinating all Britons. ONE’s analysis shows that rich countries will have 1.25 billion doses left over after vaccinating 100% of their populations.

Dodgy goods: Concerns from South Africa are emerging over evidence that Russia’s Sputnik V vaccine could increase susceptibility to HIV infection. Not good for the country with the highest prevalence of HIV.

The numbers

  • $1.2 billion: The EU doubled its contribution to COVAX
  • 23% of people in Lagos, Nigeria, have been infected with COVID-19, according to the Nigeria Centre for Disease Control
  • $36.1 billion due in debt service payments from poorer countries (eligible for DSSI) this year  

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