African countries confront mounting public debt issues

According to data from the African Development Bank Group (AfDB), as African nations grapple with escalating public debt, their capacity to achieve development objectives and alleviate poverty is increasingly endangered. Between 2010 and 2020, the gross government debt in the continent, as a percentage of GDP, almost doubled, rising from 36 percent to 70 percent.

Abdoulaye Coulibaly, the Director for Governance and Financial Management at AfDB, underscored the formidable challenges confronting African nations. These challenges include low fiscal revenues, illicit financial outflows, and limited capabilities in public financial management, particularly concerning public debt management. These difficulties have been exacerbated by various factors such as the COVID-19 pandemic, climate change, and financial strains arising from conflicts and insecurity.

Coulibaly emphasized the imperative of enhancing debt management proficiency and practicing prudent public financial policies. He pointed out that despite the escalating debt levels, African governments require an additional $432 billion to address the socio-economic repercussions of the pandemic and to facilitate recovery in 2022 and 2023. Sovereign debt is anticipated to remain high, hovering around 65 percent across the continent in 2023 and 2024.

In response to these challenges, Coulibaly called for an enhancement of debt management capabilities, the exercise of financial caution, and heightened endeavors to generate additional revenues. He stressed the significance of addressing debt-related issues while simultaneously prioritizing the management of public finances.