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AfDB says Covid-19 is giving East Africa chance to renegotiate debt

By David Whitehouse
Posted on Monday, 26 April 2021 18:04

African Development Bank headquarters in Abidjan. REUTERS/Luc Gnago

East African governments can use the Covid-19 pandemic as an opportunity to restructure their debts, Nnenna Nwabufo, African Development Bank (AfDB) director general for East Africa, tells The Africa Report.

Governments in the region can “seize the opportunity” to renegotiate or restructure their debts by lengthening maturities and lowering interest rates, Nwabufo says. “This would ease the fiscal pressures that governments are currently grappling with and create space for more targeted development spending.”

East Africa was the continent’s most resilient region in 2020 due to less reliance on primary commodities and greater diversification compared with other parts of Africa, Nwabufo says. The region’s real GDP growth will rebound to 3% in 2021 from 0.7% in 2020, with Djibouti, Tanzania and Rwanda as the potential top performers, she predicts.