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Business


AFRICA’S DEBT SERVICING HITS $74BN




africa’s debt servicing
ad
By
Sunday Michael Ogwu

Tue, 17 Dec 2024 1:28:19 WAT
 * 
 * 
 * 

The African Development Bank (AfDB) yesterday warned of the implication of
rising debt burden in Africa, saying Africa’s debt servicing has hit $74bn.

It stated that Nigeria and other African countries would require an average of
$10 billion annually for debt refinancing between 2025 and 2033.

Next Stay Exploring Ba Vi's Dragon Fruit Garden [NếmTV] 40 42 00:00 00:00 /
00:00 10 Sec

This revelation emerged on Monday during the launch of the Debt Management Forum
for Africa (DeMFA) in Abuja.

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The bank which decried the rising debt in Africa stressed the need to adopt debt
policies that promote sustainable growth and economic transformation.



Daily Trust reports that Africa’s debt hit $1.3 trillion as of 2023.

Nigeria alone has a debt burden of over N100 Trillion with the debt burden
projected to hit N138 Trillion going by the recent loan requests.

Speaking at the hybrid event, which was its inaugural policy dialogue on “Making
Debt Work for Africa: policies, practices, and options” AfDB Vice President and
Chief Economist, Professor Kevin Chika Urama, stated that Africa’s debt rose by
170 per cent since 2010.

He revealed that the debt servicing would hit $74bn in 2024, saying private
creditors account for 54 per cent of the amount.

He said, “This shift toward private debt ownership presents both opportunities
and challenges, with African nations paying up to 500 per cent more in borrowing
costs from private markets compared to multilateral development banks like the
AfDB and the World Bank.

“Africa’s debt service costs have however risen sharply, diverting resources
away from infrastructure investment, thus constraining future GDP growth and
economic transformation. For 49 African countries, average debt service cost
rose sharply from an average of 8.4 percent of GDP in 2015–19 to 12.7 percent in
2020–22.”

Also, Coordinating Minister for the Economy, Wale Edun lauded the establishment
of the DeMFA, noting its significance in addressing the unique debt management
needs of Africa’s 54 nations. He charged the DeMFA with becoming an innovative
platform to deliver solutions beyond existing debt management practices,
particularly in light of Africa’s growing debt distress.



 

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