Emerging market creditors set up AfricaPCWG, kick against blanket debt relief for Africa

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Emerging market creditors set up AfricaPCWG, kick against blanket debt relief for Africa

Prominent emerging market creditors have set up the Africa Private Creditor Working Group to assist some of the world’s poorest countries contain the economic impact of COVID-19, but have also criticised recent calls for blanket debt relief.

The AfricaPCWG will coordinate the views of over 25 asset managers and financial institutions representing total assets under management in excess of $9 trillion, the new group said in a statement on Friday.

It will provide African governments, the G20, the International Monetary Fund and other multilateral development banks a forum through which all stakeholders “can engage transparently and constructively” on broad issues arising due to the COVID-19 crisis.

The working group “stands ready to buttress efforts being made by the multilateral and bilateral sectors by offering its collective institutional experience to provide guidance and support on a case-by-case basis”.

However, it added a one-size-fits-all solution would be counterproductive. The group of 20 top economies has urged private creditors to match their proposal to allow the poorest nations to suspend debt payments for the rest of the year.

“A rushed, blanket approach developed during a time of crisis will put that crucial long-term access to capital at risk,” the working group said.

REUTERS