UN cautions of continuing debt crisis in Africa amid current financial challenges


(MENAFN) During a conference held in Victoria Falls, a United Nations official delivered a sobering message regarding Africa's economic outlook, particularly concerning its mounting public debt. Adam Al-Harika, the Director of Macroeconomics and Government at the United Nations Economic Commission for Africa, highlighted the concerning projection that Africa's public debt levels would remain elevated above pre-Covid-19 pandemic levels throughout 2024 and 2025. This revelation comes at a time when numerous African nations are grappling with the looming threat of descending into a debt crisis, struggling to meet their international loan obligations.

Al-Harika's address shed light on the severity of the situation, indicating that eight countries on the continent are already in the throes of a debt crisis, with an additional 13 nations teetering on the brink of similar financial turmoil. The confluence of factors, including the enduring effects of the Covid-19 pandemic, the escalation of conflict in Ukraine, and the uptick in US interest rates, has exacerbated economic challenges across Africa, leaving governments mired in financial distress and confronted with a daunting debt burden.

Al-Harika emphasized the magnitude of Africa's debt burden, underscoring that the debt-to-GDP ratio had surged to 62.5 percent by the close of 2022. This represents a doubling of the percentage from the previous decade, with projections suggesting a further increase of 10 percentage points over the next five years if corrective measures are not swiftly implemented to alter Africa's financial trajectory.

The United Nations official stressed the imperative for African nations to collaborate with international partners in addressing the looming debt crisis, highlighting the importance of concerted efforts to alleviate the financial strain gripping the continent. Moreover, Al-Harika lamented the widening financial deficit in Africa, revealing that it reached 4.6 percent of GDP in the previous year, with expectations pointing towards a further increase to five percent in 2024. These sobering statistics underscore the urgent need for coordinated action to mitigate Africa's escalating debt burden and safeguard its economic stability.

MENAFN29022024000045015682ID1107915173


Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.