The United Nations Economic Commission for Africa, ECA, has raised concerns over Africa’s growing debt crisis, disclosing that 40% of the continent’s nations are either in debt distress or at high risk.
ECA Deputy Executive Secretary Hanan Morsy at the 2024 African Economic Conference in Botswana highlighted that many African countries are spending more on debt interest payments than on critical development sectors.
Themed: “Securing Africa’s Economic Future Amidst Rising Uncertainty,“ the conference, co-hosted by the African Development Bank , AfDB, the ECA, and the United Nations Development Programme, brought together policymakers, economists, and leaders to address financial and developmental challenges.
Morsy called for an overhaul of the G20 Common Framework, advocating for greater efficiency, inclusivity, and transparency in debt resolution processes. She emphasized the need for diversified funding sources, pointing to Egypt’s successful Samurai and Panda bond issuances, which offered significantly lower interest rates compared to Eurobonds.
She also criticized the inequitable distribution of the International Monetary Fund’s Special Drawing Rights, SDRs, with Africa receiving only 5% of the $650 billion issued post-COVID-19.
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Prof. Kevin Urama, Chief Economist at the AfDB, emphasized the need for capacity building through initiatives like the Public Financial Management Academy for Africa. He proposed rechanneling unused SDRs from wealthier nations to Africa via development banks like the AfDB, ensuring funds reach areas of greatest need.
The discussions underscored the urgency of systemic financial reforms to unlock economic growth, create jobs, and foster sustainable revenue generation. Speakers emphasized African-led solutions and collective negotiation strategies to address the continent’s economic vulnerabilities.
While global factors such as economic volatility, climate change, and trade dynamics contribute to uncertainty, internal efforts to strengthen governance, diversify economies, and foster regional cooperation can help promote economic sovereignty and sustainable development.
The AEC 2024 provides an opportunity for the participants to review the continent’s experience with shocks (Covid-19 pandemic, wars, political instability) and identify opportunities and strategies for building resilient development pathways.
The conference also provides a platform for established academics and young researchers to present their solution-oriented research on how to strengthen Africa’s resilience to shocks to meet the Sustainable Development Goals and Africa Union’s Agenda 2063 aspirations.
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