Recent debt relief measures will not help Togo, according to Moody’s

Public finance
Monday, 04 May 2020 16:41
Recent debt relief measures will not help Togo, according to Moody’s

(Togo First) - Recent debt relief measures will have very little impact on Togo’s needs for financing, according to US rating agency Moody’s. 

In a recent assessment of the Togolese economy released on April 27, 2020, the agency explains that for 2020, debt servicing to official lenders (bilateral and multilateral) equals only 1% of the GDP, while payment of external interest rates for its part corresponds to around 0.2% of the GDP.

Meanwhile, the country’s financing needs are estimated at close to 18% of the GDP for the same period. 

For Togo, the debt relief approved by the IMF for 25 developing countries on April 25 clears only about XOF3 billion of its debt. Moreover, the decision of the G20 to delay debt payment does not affect the country’s budget much. This is because Togo, for a long time, received no external funding and its debt is mostly internal. 

Very recently, many African leaders, as well as major international finance actors, asked the IMF to proceed to an urgent issue of IMF’s special drawing rights for Africa. 

Commenting on possible solutions, Boni Yayi, former President of Benin and ex-chief of the BOAD, declared in an interview with French newspaper Le Monde: “Concerning economic solutions adapted for the continent, I believe there are two main challenges: First, new funds should be mobilized to handle the crisis sparked by the virus; Second is writing off Africa’s debt in the framework of a strategic partnership, without impairing the continent’s attractiveness.”

Fiacre E. Kakpo

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