OPINION | Africa’s children are paying for Covid-19 with their futures, smart debt relief is a must

Smart debt relief is needed in sub-Saharan Africa where 16 of the poorest governments were spending more on servicing debt than on all social sectors combined before Covid-19, write Matthew Cummins and Paul Quarles van Ufford.

While the global spotlight remains firmly fixed on the battle against Covid-19 in wealthy countries, the life and death challenges faced by populations in developing countries, especially children, have steadily worsened over the past 12 months, mainly in darkness and with only tokenistic support from global institutions. 

Covid-19 has spared no country. But for people living in sub-Saharan Africa, the pandemic magnifies a long list of troubles. Start with economic growth. Before the pandemic struck, the economy moved so slowly that it would have taken the average person around 45 years to double their income. Then, almost instantly, nearly 15 years of income progress disappeared. Even more troubling, sub-Saharan Africa will be the world's slowest-growing region in 2021: barely 1% on a per capita basis. 

Poverty records are being shattered. Using the $1.90/day international definition, an estimated 50 million people have been pushed into extreme poverty in the region in the past year. This is the most significant change ever recorded. 

Add on lost learning – that's around 350 million children who have not gone to school; growing levels of hunger and malnutrition – around half of the population is currently affected by food insecurity; the re-emergence of basic health threats – like cholera, malaria and measles; and rising protection risks – from teenage pregnancies and child marriage to sexual, physical and emotional abuse, and much of the continent is facing a human capital catastrophe. 

Climate impact 

Covid-19 is just one of many drivers. In addition to the economic and viral pains, most African nations are also dealing with climate shocks, ranging from droughts and floods to cyclones and locust invasions and intensifying insecurity. 

These were among the many dark clouds over the recent spring meetings of the International Monetary Fund (IMF) and World Bank, where finance ministers, central bankers, private sector executives and others debated ways to fix the Covid-19 mess. For citizens of sub-Saharan Africa, the outcomes were disappointing: global decision makers did not agree that their governments needed meaningful assistance to protect people in the moment of great need.  

Even when combining domestic stimulus and all forms of external assistance, the average person in the region has benefited from around $40 in emergency support since the start of the crisis. Compare that to $2 400 for citizens of G20 countries.  

Given the astronomical funding gaps and severe pressures on domestic revenue, it should be easy to forge global consensus for new support to the continent. Think again.  

The numbers speak for themselves. Before Covid-19, 16 of the poorest governments in sub-Saharan Africa were spending more on servicing debt than on all social sectors combined. The difference was threefold in places like Chad and The Gambia and as high as elevenfold in South Sudan. And despite some help through the G20's Debt Service Suspension Initiative (DSSI), around $2.5 billion continues to flow to creditors outside Africa's borders each month instead of into the futures of children at home. 

We've now reached the point where every shilling, franc or rand going to service debt is one less for health care, social protection, education and other essential services. Unicef sounded this alarm bell just ahead of the Spring Meetings in a report entitled A Looming Debt Crisis. 

Unlike the coronavirus, Africa's debt crisis is not novel. Debt has, in fact, nearly doubled, on average over the past decade. But most of this was for a good reason: investing in productive capacities and people. The problem is that repayment terms never accounted for a pandemic-induced global recession and an unthinkable collapse in public revenue.  

Socio-economic recovery

Like most governments, African nations are looking for opportunities to increase spending, whether by reducing interest bills or accessing fresh funding. Since the start of the crisis, Australia and the United States have borrowed around $20 000 per citizen to finance stimuli and family support programmes, which is closer to $15 000 per head in Canada, Japan, the United Kingdom, and an around $10 000 equivalent in France, Germany and Italy. Sub-Saharan Africa seeks much less, about $365 per person in new support to make ends meet over the next five years – or $73 annually.  

To avoid a debt repayment/irreversible-loss-in-human-capital, trade-off requires an international debt restructuring architecture: one that creates the foundation for an inclusive and sustainable socio-economic recovery for all Africans.  

In line with fiscal responses elsewhere, governments in sub-Saharan Africa should be able to put social protection at the centre of their crisis response and recovery plans. Cash transfers, in particular, can prevent or minimise nearly every risk that vulnerable households and children are facing right now; they can also generate robust economic growth. 

So, let's link debt relief to funding for social protection. We call this "smart debt relief" for three reasons:

1. It avoids an unacceptable situation whereby debt servicing contributes to a vicious cycle of lending.
2. It releases and channels finance to where investments are most needed: families and children.
3. It catalyses more than a decade of momentum, as governments across sub-Saharan Africa have adopted policies, launched national cash transfer programme and made them part of their development plans.  

Smart debt relief must start with extending the DSSI through 2023 (it currently expires in December) and providing some debt forgiveness to the neediest governments that guarantee new spending on social protection. It also requires that the G20 Common Framework for Debt Treatments be institutionalised to coordinate the rescheduling of debt held by official bilateral and private-sector creditors, again with greater flexibility for countries that demonstrate social protection commitments. Most importantly, smart debt relief must be complemented by additional support, including grant and highly concessional finance, so that sub-Saharan African countries have a realistic chance of closing funding gaps and protecting human capital. 

The next time the world gets together to debate the future, whether it be the United Nations General Assembly (September), the IMF and World Bank Fall Meetings or the G20 Summit (both in October), let's make sure that the spotlight shines brightly on Africa's children and practical ways to level the playing field when it comes to opportunities in life.

Smart debt relief should be viewed as the first step in a much larger support package for the continent, for its children, and its economic and development potential. 

- Matthew Cummins is the Social Policy Regional Adviser for Unicef Eastern and Southern Africa

- Paul Quarles van Ufford is the Social Policy Regional Adviser, Unicef West and Central Africa

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