The Africa Private Creditor Working Group is an initiative to represent the views of international private creditors invested in Africa and to work with countries on their financing needs during the COVID-19 crisis.
The AfricaPCWG will provide African Governments, the UNECA, the G20, the IMF and other Multilateral Development Banks (“MDBs”) a forum through which all stakeholders can engage transparently and constructively with different categories of private international investors in African sovereign and corporate debt to coordinate the resolution of broad issues arising due to the COVID-19 crisis.
The AfricaPCWG is coordinating the views of over 25 of the world’s foremost asset managers and financial institutions providing private finance to nations and companies through Eurobonds, syndicated loans, trade finance and other credit structures across the continent of Africa. These investors bring significant expertise and experience in Africa and other Emerging Markets, and represent total assets under management in excess of US$9 trillion.
The AfricaPCWG understands that private sector creditors have an essential role in assisting some of the world’s poorest countries to contain the economic impact of COVID-19, and stands ready to buttress efforts being made by the multilateral and bilateral sectors by offering its collective institutional experience to provide guidance and support on a case-by-case basis.
Participants in the AfricaPCWG forum have already established a number of core principles of engagement. Upmost amongst these is the belief that a one-size-fits-all solution will be counter-productive for the nations and people of Africa. Such an approach risks needlessly cutting many countries off from international commercial debt markets and is likely to lead to an overall increase in the cost of capital for all emerging market sovereign and corporate debt issuers for years to come. Each African country has its own very particular fiscal and social dynamics, with some governments having developed hard fought, low cost access to debt markets, and these distinct profiles must be acknowledged as part of any successful approach to debt management.
Future generations of Africans will need to access private capital to invest in hospitals, roads, education, healthcare systems and other infrastructure critical for economic and societal development. A rushed, blanket approach developed during a time of crisis will put that crucial long-term access to capital at risk.
As participants in the AfricaPCWG, Lars Bane of Farallon Capital Europe LLP, Kevin Daly of Aberdeen Asset Management PLC, Alex Garrard of Amia Capital LLP, Mike Hugman of Ninety One UK Limited, Hans Humes of Greylock Capital Management, LLC, and Nicolas Sagna of Pharo Management, Inc. noted the following:
“Global cooperation is vital at this time of COVID-19 crisis, which is why international private creditors invested in the continent have established the Africa Private Creditor Working Group. We stand ready to provide support to all countries across the continent on a case-by-case basis, ensuring that the conditions for continued access to private capital remain in place, which is so vital for the development of societies and economies in the years ahead.”
