COVID-19: Finance minister Ken Ofori-Atta urges China to support Africa with debt reliefs
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COVID-19: Finance minister Ken Ofori-Atta urges China to support Africa with debt reliefs

- Ghana's finance minister, Ken Ofori-Atta, has called on China to provide reliefs to African countries saddled with debts

- He noted that the Asian country has come out stronger since the coronavirus outbreak began spreading worldwide

- Ofori-Atta revealed that Africa's total debt owed China stands at an estimated $145 billion

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The minister of finance, Ken Ofori-Atta, has called on China to assist African countries with debt reliefs.

According to him, the move would help ease the economic burden on African countries reeling from the impact of the outbreak.

YEN.com.gh earlier reported that he estimated the cumulative effect of the coronavirus could severely affect Ghana’s economy.

READ ALSO: Bank of Ghana says Ghana's total debt stock experienced a 25.93% increase

As part of his interactions with a United States-based think-tank, Center for Global Development, on debt challenges African countries regularly face, he explained that “China has to come on stronger” on debt relief during “this apocalyptic moment”.

Per a citibusinessnews.com report, Ofori-Atta revealed that it is likely Africa’s total debt to China stands at about $145 billion.

He added that African countries are on the lookout for ways to increase their Special Drawing Rights (SDR), which are supplementary foreign exchange reserve assets managed by the International Monetary Fund (IMF).

Ofori-Atta, however, indicated that it should be done in a way that does not lead to an increase in commercial debt.

READ ALSO: COVID-19: African finance ministers call for $100 billion stimulus and debt holidays

In his opinion, there is a need for Africa to find a way to increase SDRs or for the Europeans to offer their SDRs as a way out.

Meanwhile, it has emerged that the bulk of debts accumulated by African countries are linked to commodities.

A month ago, the president of the World Bank, David Malpass, noted that some African countries continue to pile debts.

He added that there was an apparent lack of transparency in some loan deals reached with China.

Africa’s debts climbed by about 150% from $236 billion in 2008 to over $583 billion 10 years later, according to the World Bank.

READ ALSO: Africa's rising debt causes tension between the World Bank and lenders

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Source: Yen

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