African nations are projected to spend $74 billion on debt servicing in 2024, marking a significant rise from $17 billion in 2010. This was revealed by Prof. Kevin Urama, Chief Economist and Vice President of Economic Governance and Knowledge Management at the African Development Bank (AfDB), during the launch of the Debt Management Forum for Africa (DeMFA) in Abuja on Monday.
Themed “Making Debt Work for Africa: Policies, Practices, and Options,” the forum highlighted the mounting debt challenges faced by African countries. Urama explained that $40 billion, representing 54% of the total debt service obligation, is owed to private creditors. He cautioned that the figure could be higher when hidden debts and contingent liabilities are factored in.
“Twenty African countries are in debt distress or at high risk of debt distress, with refinancing risks expected to rise for nations with significant bullet redemptions,” Urama stated.
Debt Sustainability and Liquidity Pressures
Urama underscored the disparity in debt management between developed and developing nations, emphasizing that Africa’s debt burden diverts substantial fiscal resources from development priorities.
“While developed countries can sustain high levels of debt with low service burdens, Africa’s most vulnerable nations are dedicating increasingly large proportions of fiscal resources to debt service,” he added.
Source: norvanpeports.com