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Waiving interest payments on African debt could provide much-needed economic stimulus

Almost half of the immediate economic stimulus of $100bn needed to combat the impact of the coronavirus pandemic could come from waiving interest payments for African countries, says the United Nations Economic Commission for Africa (UNECA).

Waiving an estimated $44bn of interest on sovereign debt in 2020 would boost liquidity and fiscal space for governments struggling to respond to the rapidly-spreading virus.

Government debt has risen sharply in sub-Saharan Africa over the past decade as investors flock to developing countries in search of higher returns and governments aim to finance ambitious infrastructure projects.

External debt payments account for an average 13% of revenue in Africa, according to data compiled by the UK-based Jubilee Debt Campaign.

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