"Africa finds \u2018no mercy\u2019 from global cash crunch it didn\u2019t cause"

" Africa finds \u2018no mercy\u2019 from global cash crunch it didn\u2019t cause \r\n\r\nAfrican finance ministers appealed for help and \u201ccommon humanity\u201d in their fight against a vicious funding squeeze caused by mistakes its politicians blame on wealthy countries, which the Israel-Hamas war may now make worse.\r\n\r\nHigher interest rates and surging inflation after the US and Europe spent trillions of dollars during the pandemic hit poor nations from both sides, said Egyptian Finance Minister Mohamed Maait.\r\n\r\n\u201cWe have to pay the cost,\u201d he said Saturday in Marrakech, Morocco during an event on the sidelines of the annual meetings of the International Monetary Fund and World Bank. \u201cWith the war, the pain becomes very hard for us.\u201d\r\n\r\nThe potential risk to the global economy from a widening Middle East conflict \u2013 and what that would mean for poor nations already in debt distress \u2013 has been a key concern during the gatherings. The meeting is being held in Africa for the first time since 1973.\r\n\r\nSurging food prices in the aftermath Russia\u2019s invasion of Ukraine have caused a cost of living crisis across Africa, while heavy borrowing costs are raising the risk of default.\r\n\r\nZambia on Saturday confirmed it had agreed to a memorandum of understanding to restructure its loans with official creditors, co-led by China and France, finalizing a $6.3-billion deal reached almost four months ago.\r\n\r\nEgypt is in talks with the IMF to boost its rescue program to over $5 billion from $3 billion, according to people familiar with the discussions.\r\n\r\nMaait, on Saturday, said it \u201cwent east\u201d to find affordable lending and will issue a panda bond next week, because western capital markets became too costly.\r\n\r\n\u201cThe issue of high debt, high debt financing, low liquidity \u2014 all these represent the challenges we\u2019re facing,\u201d he told the event hosted by the African Center for Economic Transformation and the Policy Center for the New South. \u201cThe rating agencies have no mercy to our situation.\u201d\r\n\r\nThe IMF estimates that more than half of Africa\u2019s low-income countries either face a high risk of debt distress or are already experiencing it. Other countries have seen the average yields on their outstanding eurobonds rise to more than 12% from 7% before the pandemic.\r\n\r\nKenya is one of the countries that has to refinance in a climate of much higher rates, and is weighing borrowing from multilateral and bilateral lenders to repay a $2 billion eurobond in June.\r\n\r\n\u201cWe\u2019re not facing a solvency problem, we\u2019re facing a liquidity challenge,\u201d said Treasury Secretary Njuguna Ndung\u2019u. \u201cBut how we solve those liquidity challenges can become a solvency problem.\u201d\r\n\r\nBoosting the resources of the Washington-based lenders to help them massively increase the amount of funding they can provide the region has been a key theme of the meetings.\r\n\r\nBut that requires the support of major shareholders and so far it\u2019s not been forthcoming because of a lack of political will, Ghana\u2019s finance minister said.\r\n\r\n\u201cYou wonder where is the leadership of the past? The FDRs, the Mandelas,\u201d said Ghanaian Finance Minister Ken Ofori-Atta. \u201cIt is a question of where our common humanity is.\u201d"

"Africa finds \u2018no mercy\u2019 from global cash crunch it didn\u2019t cause"

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