South Africa won’t join collective negotiations with creditors to suspend or write off African nations’ debt, an envoy for the country has said.
Trevor Manuel, a special envoy to the African Union, said his country’s position is complex because most of its debt is held locally. Some African governments are pushing for a moratorium to repay international creditors after coronavirus-induced lockdowns damaged their economies.
“The bulk of the debt is actually held by South African pension funds,” the former finance minister said.
Institutions including the World Bank and International Monetary Fund have indicated they would negotiate with each country individually and not as a bloc, he said.
The World Bank warned in April that sub-Saharan Africa will suffer its first recession in 25 years, with gross domestic product in the region probably shrinking between 2.1% and 5.1% in 2020.
South African President Cyril Ramaphosa said last month that the continent could get more than $200bn in additional support after the United Nations called for a global response package for the virus.