The FES AU Cooperation office in collaboration with the African Union ETTIM department has organized a side event on the 23rd November under the auspices of ‘Debt for Financing’ on the occasion of the yearly African Industrialization Week, which was held from 20-25th November 2022 in Niamey, Niger.
The session highlights prudent use of debt as an important part of effective debt management strategy. Thus far, what is evident in the last couple of decades in Africa is a significant increase in the amount of sovereign debt, however, the trend, underlying practice and debt management strategies remains unchanged. That in return has exacerbated the already existed debt problem. To this date, African countries have continued to borrow in un precedented level but with no or little emphasis on its impact in the long term.
The panel recognizes the role debt plays in revenue generating and spurs growth that increases the productive capacity of African economies, however, this could be only be realized when a smart, a negotiated and planned borrowing practice is in place. Thus, it is at most responsibility of policymakers in Africa to design, contract, plan and utilize the resource in a manner which can generate a higher revenue or return - all of which are crucial to a long-term development agenda.
The session concludes by highlighting the debt management practices in Africa and policies to ensure debt sustainability as well as growth. Thus far, only a handful of African countries have debt management policies and strategies to track and efficiently manage their public debt (FES, 2022). As it has been witnessed in the last two decades in Africa, stringent debt management policies and strategies are absent and there is also limited space for accountability. The session recognizes the role played by the African Union to mainstream the agenda of debt management and tasks the union to a have concerted discussion with a member states, RECs and relevant stakeholders in finding a lasting solution for the mounting debt problem.
To access our publication on debt and other related issues please visit our webpage.
For more information on this topic, please contact Mr. Amanuel Desalegne
Program Manager, FES AU Cooperation Office
Mob: +251 911 197062