COVID-19 and Sovereign Debt: The Case of SADC

The COVID-19 pandemic has resulted in the most serious global health crisis of the past century. For many African countries in particular, the pandemic has also had severe social and economic impacts. Already fragile welfare systems have been threatened or overwhelmed. In addition, the pandemic has adversely affected African intraregional and international trade, investment flows and access to financing, but its full impact is still unfolding. One indicator of the full effect of the pandemic will be its impact on the ability of African countries to make their scheduled sovereign debt payments over the next few years.

Featuring contributions from Kevin P.Gallagher, Yan Wang and Magalie Masamba, the new book, “COVID-19 and Sovereign Debt: The Case of SADC” is a multi-disciplinary publication focused on the issue of African sovereign debt management and renegotiation/restructuring, with a particular concentration on the countries that are members of the Southern Africa Development Community (SADC). It contains a series of essays that were initially presented in several workshops held in 2020 at the height of the pandemic. The essays seek to both understand the debt challenges facing SADC and to offer policy-oriented suggestions for effectively addressing them. With contributions by global and regional scholars who are seasoned experts, as well as newer researchers, the collection discusses the complexities on debt management and restructuring within the context of the global COVID-19 pandemic.

In particular, contributing to the collection was an opportunity for junior researchers from the region to contribute to international discussions on a topic in which the views of young Africans are not heard as often or as clearly as they should be, especially given the importance of the topic to Africa and its future. Furthermore, the book is expected to stimulate debate among academics, activists, policymakers and practitioners on how SADC should manage its debt.

Featured chapters:

• Sovereign debt management and restructuring in SADC: Setting the scene and asking the right question by Daniel Bradlow and Magalie Masamba
  • The first section of this publication provides a synopsis of the current debt landscape in the SADC region in the context of the global debt situation and the COVID-19 pandemic. Secondly, Bradlow and Masamba outline the chapters to come, detailing each contribution and its contents.
• Sovereign debt via the lens of asset management: Implications for SADC countries by Kevin P. Gallagher and Yan Wang
  • In Chapter 5, Gallagher and Wang focus on how debt sustainability is determined and highlight some shortcomings with the current approach to this issue and its implications for the SADC region. The authors propose an innovative ‘public sector balance sheet’ approach to determining debt sustainability, arguing it would provide a more useful view of debt sustainability than the conventional debt to GDP approach.
• Sovereign debt restructuring and human rights: Overcoming a false binary by Magalie Masamba
  • In Chapter 8, Masamba explores the link between sovereign debt and human rights, identifying what has become a glaring disconnect between the two fields. She additionally argues that there is a place for human rights in the sovereign debt discourse and maintains that this is a relatively overlooked issue in the discourse on sovereign debt restructuring.
• Building back better post-COVID 19: Lessons learnt and the future of sovereign debt management and restructuring in SADC by Daniel Bradlow and Magalie Masamba
  • Finally, in Chapter 15, Bradlow and Masamba draw collective lessons and guideposts for policymakers, industry experts and academics interested in the management of sovereign debt in the SADC region.

The editors and contributors of this book sought to look beyond the COVID-19 pandemic and to focus more closely on the broader structural weaknesses in the international debt management landscape. They were motivated by the fact that the debt woes of SADC and the broader continent not only predate COVID-19, but are also exacerbated by the deeper structural weaknesses and vulnerabilities that have been exposed by the pandemic. In other words, the pandemic is merely another factor contributing to the difficult debt situation of some SADC states, rather than the sole cause of the region’s debt crisis. Despite the many layers of the debt crisis in SADC states, the solution remains the same: the authors call for debt transparency, good governance and collaboration with international organizations.