Africa Needs Its Own ‘Repo’ Market

The global health and economic crises gripping Africa are hurtling the region into its first full recession in a quarter of a century. Economic growth in Africa, which had been forecast at 3.2 per cent, is now expected to be between zero and 1.0 per cent, according to the UN Economic Commission for Africa, the Financial Times reported in a commentary. The crisis highlights the needs for urgent economic and financial measures to help soften the blow. The G20’s decision to suspend debt service for the poorest countries will help. But Africa’s needs are much bigger and urgent. It is time to create a new asset class that would attract a new class of investors while shaving off the higher borrowing costs that African nations face because of age-old stubbornly sticky perceptions that they are especially risky. To do that, we should create a new sustainability and liquidity facility for the continent, modelled on existing market-based and commonly used facilities in Europe and the US. Read more