The AfDB President, Akinwumi Adesina has cautioned African nations over the escalating debt the continent is accruing which he describes as worrying.
The president disclosed that he felt the need to address the ever rising debt to avoid another decade of ruin. He also explained that African countries will need to eliminate all forms of leakages in public resources and improve transparency
Adesina made the pronouncements at the virtual launch of the African Economic Outlook 2021 conference. In his words, Adesina claims that the issue of debt overhead as a whole is not sustainable as the sum of 70 -75 percent of the Gross Domestic Product.
He also raised alarm over the illicit cash flow into the continent which he estimates at over $70 billion and advised that it be checked.
“Today, the amount of illicit capital flow is over $70bn; you have multinational companies that are not paying their taxes, we are losing billions of dollars to that. There needs to be a look at that.”
“The amount of debt that we have right now is about 70 to 75 per cent of the Gross Domestic Product. It used to be sustainable, but what is even more alarming is the structure of the debt, where the debt right now is largely in the hands of commercial creditors, almost $337bn in terms of high creditors and those that are the private creditors without any type of securitisation for it. That is very worrying indeed.”
As a solution, he disclosed that global partnership efforts are currently underway by the G20 to proffer temporary debt relief for developing countries which he explained are deferred till a later time and only cover a small fraction of the continent’s total debt profile.
He also encouraged the private sector creditors to be a part of the solution.