By Yemi Olakitan
The African Development Bank (AfDB) has proposed strategic recommendations to help Nigeria and other African countries tackle their escalating debt burdens and foreign exchange challenges. Prof. Kevin Urama, the Bank’s Vice-President for Economic Governance and Knowledge Management, shared these insights in an interview on Monday.
According to Urama, debt can be a powerful tool for economic growth when used strategically. “Debt for growth is a recognized strategy for economic development. However, the structure and quality of the debt are critical in determining its long-term sustainability and impact,” he emphasized.
The AfDB’s Chief Economist also expressed concerns about African countries’ increasing reliance on short-term, high-cost commercial loans, which can exacerbate debt burdens and hinder economic growth.
According to him, African countries should explore alternative funding sources, such as long-term bonds and concessional loans, to reduce their reliance on short-term commercial loans.
They should strengthen their debt management frameworks to ensure debt is used efficiently and effectively.
African countries should also diversify their economies to reduce dependence on a single commodity or industry.
By implementing these recommendations, African countries, including Nigeria, can better manage their debt burdens and foreign exchange challenges, ultimately promoting economic growth and development.
