Through this partnership, the ECA will provide technical expertise to support African governments in the evaluation of their needs under the DSSI, endorsed in April by the G20 and the Paris Club in the aftermath of Covid-19 economic crisis. The assistance will focus on capacity building in various areas, such as risks analysis and mitigation, identification of the drivers of debt sustainability, real economy financing policies or credit rating and regulation. The technical assistance will also promote greater coordination between public and private creditors.
The DSSI enables a fast and coordinated release of additional resources to beneficiary countries to bolster their crisis mitigation efforts. So far, 43 countries are benefitting from an estimated US$5 billion in temporary debt service suspension, accounting for more than 75% of eligible official bilateral debt service under the DSSI in 2020. In October 2020, the G20 agreed to extend the DSSI by 6 months.
“Clearly, the priority must now be to free up more resources so that African governments can respond more effectively to the Covid-19 pandemic and in particular to the challenges of social protection and employment”, French Ambassador to Ethiopia and to the African Union, Mr Rémi Maréchaux, said.
According to AFD CEO, Rémy Rioux, “As a Public Development Bank, AFD reaffirms its commitment to financing African economies in the long run, including by providing the technical instruments required for governments to assess their debt consolidation needs and to make the most of the G20 debt service suspension initiative as they face the Covid-19 crisis. In this endeavor, AFD is very proud to partner with the UN Economic Commission for Africa”.
Vera Songwe, Under-Secretary General of the United Nations and Executive Secretary of the Economic Commission for Africa, welcomed the shared UNECA-AFD ambition to support African countries fill the US$ 345 billion financing gap needed to recover from the Covid-19 pandemic and attain a sustainable path of development. She further added, “Post-Covid-19 economic recovery in Africa will need to be accompanied by reforms that are not too restrictive fiscally and efforts to crowd-in the private sector”.