The African Development Bank (AfDB) has launched a Debt Management Forum for Africa to help African countries manage their debt challenges.
In a statement, AfDB Group chief economist and vice president for economic governance and knowledge management Kevin Urama described the emergence of the forum as “another key milestone in the bank’s efforts to build Africa’s capacities and provide institutional frameworks”.
He said: “We must learn that development is a do-it-yourself business.”
On his part, AfDB African Development Institute director Eric Ogunleye said among the forum’s goals is strengthening African technical capacity for debt management, securing better credit rating for African countries and the alleviation of debt distress in all African countries.
“There is no alternative to getting our house in order; there is no alternative to sound public financial management in Africa. We need to make Africa’s capital work for Africa’s development,” stressed AfDB Group vice-president Urama.
AfDB data shoes that in the last two decades, Africa’s fiscal deficits have increased from $0.8 billion to almost $150 billion, with the debt-to-GDP ratio more than doubling from 33.6 percent in 2008 to 72.4 percent in 2021, before falling back to 64.8 percent in 2022.
With global interest rates at their highest level in 40 years, debt service will cost Africa about $163 billion in 2024, up sharply from $61 billion in 2010.
Data contained in the 2023 World Bank International Debt Report shows that by the end of 2023/24 financial year, Malawi Government’s payments had spiralled to K931.4 billion and is expected to rise further to K1.46 trillion in the current fiscal year.
Interest on foreign debt is estimated at K79.74 billion (about $45.5 million), more than double the amount paid in 2022.
