Africa eyes own ‘Brady Plan’ as debt relief proposal takes shape

The African Union , the UN Economic Commission for Africa and a group of finance ministers from the continent are designing a special-purpose vehicle for the swap.

“Bondholders should in principle be eager to participate because they will give up an obligation that is illiquid for triple-A paper that you can put in any basket,” Uneca’s executive secretary, Vera Songwe, said. Last week, the AU’s special envoy for the pandemic response, Ngozi Okonjo-Iweala, said the special-purpose vehicle could also be financed by special drawing rights of rich nations at the International Monetary Fund.Another AU special envoy, Tidjane Thiam, former CEO of Credit Suisse Group, said the group was in talks with bondholders, ratings agencies and some countries to make a commercial debt standstill viable.

“It’s better to come into this scheme in an orderly manner than six to nine months down the road having to go to Washington to negotiate this, alone, under duress.”

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