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Wednesday, February 1, 2023

Private Creditors Form Group to Negotiate Africa Debt Relief

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Private creditors representing more than $9 trillion of assets under management have formed a group to negotiate for Africa debt relief.

The so-called Africa Private Creditor Working Group will assist African countries and other debt providers to cushion the economic impact of the coronavirus pandemic on the continent, it said in a statement Friday.

The group represents 25 asset managers and institutions that financed countries and corporates via Eurobond, syndicated loans and trade finance. It warned of the risks of a blanket approach to the process.

African countries are asking official and private creditors to temporarily suspend $44 billion in debt payments this year in order to channel scarce resources to contain the spread of the coronavirus. Some investors are concerned that countries could unilaterally halt payments, locking them out of debt markets and hurting creditors as well.

The group’s members include Aberdeen Asset Management Plc, Amia Capital LLP, Ninety-One U.K. Ltd., Pharo Management LLC and Greylock Capital Management LLC.

The pandemic has raised the specter of a slew of debt defaults in developing countries that had to shut down their economies to try and stop the spread of the virus. Demand for the raw materials many of the nation’s produce has plummeted.

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