In light of the ongoing United Nations General Assembly (UNGA), leaders all across the world have tabled crucial issues.
One such nagging issue is the subject of Africa’s debt. Africa like every other continent is rife with debt. There has been a need for constant bailouts from foreign lenders, and this has created a financial paradox.
During the UNGA meeting in New York, the newly elected President of Kenya, President William Ruto used the platform to create a dialogue on the subject. He addressed the UN, urging rich countries and global lenders to review debt owed by poorer African countries.
He noted that the debt these countries are paying is eating away at the little revenue they manage. He called for the heavy burden to be lifted so that these countries can be allowed the resources to develop.
The concern of the Kenyan President is not a detached sentiment. Many African governments also share the same view.
The President of Zambia, President Hakainde Hichilema in an interview with the BBC called the $1.3 billion dollars his administration borrowed from the International Monetary Fund (IMF) “circumstantial.” He noted that it was nothing to be proud of, but necessary because of the situation his administration inherited.
Hakainde Hichilema explained that debt service should be released, to allow his country’s revenue to be poured back into the economy, prompting more development.
“If you have a debt service of $19 billion if you begin to lower this package and replace it with a fairly priced capital, all these revenues released from debt service are going back into revenue regeneration.”
During the UNGA address, William Ruto said; “Our home region of Eastern and Horn of Africa is, in particular, burdened by significant conflicts and changes with implications for the region’s development.”
President of the African Development Bank, Akinwumi Adesina, said that Africa needs help in tackling its debt burden.
“Financing is critical because the debt to GDP ratio of Africa has increased to 70 per cent — several countries are the risk of high debt distress due to unstable, unsustainable debt levels.” He said. “Nigeria’s total debt level is N42.84tn or $103bn. External debt levels stand at N16.61tn or $40bn. Ladies and gentlemen, Nigeria needs help to tackle this debt burden.”
He made this statement at the Nigeria International Economic Partnership Forum in New York on Thursday.
Experts have become concerned with the rate at which Africa is forced to reimburse its lenders. Repayment to rich countries, and organizations like the IMF and World Bank could stifle the economic growth in the continent as countries that should naturally pour their revenue as capital back into their economy, are using said revenue to pay their seemingly endless debt.