Mohamed Garba
The African Development Bank (AfDB) has warned that Africa’s rising debt burden poses a significant threat to the continent’s economic stability. According to the bank, Nigeria and other African countries will require an average of $10 billion annually for debt refinancing from 2025 to 2033.
The warning was sounded during the launch of the Debt Management Forum for Africa (DeMFA) in Abuja, where the bank emphasized the need for strategic reforms to address Africa’s debt sustainability challenges. AfDB Vice President and Chief Economist, Prof. Kevin Chika Urama, highlighted the complexities of Africa’s debt crisis, noting that the continent’s public debt has surged by 170% since 2010.
The bank attributed the rising debt burden to structural issues in the global debt architecture, recent global and domestic shocks, and weaknesses in Africa’s macroeconomic fundamentals. Urama warned that if left unchecked, the debt crisis could have severe consequences for Africa’s economic growth and development.
To address the crisis, the AfDB has launched the Debt Management Forum for Africa (DeMFA), which aims to provide a platform for African countries to share experiences and best practices in debt management. The forum will also provide technical assistance and capacity-building programs to help African countries improve their debt management capabilities.
In addition, the AfDB has approved a $500 million loan to Nigeria to finance the country’s development projects. The bank has also invested $15 million in InfraCredit, a Nigerian infrastructure development company, to support the country’s infrastructure development.
The AfDB’s warning on Africa’s rising debt burden highlights the need for urgent action to address the crisis. African countries must work together to develop effective debt management strategies and seek support from international organizations like the AfDB to mitigate the risks associated with high levels of debt.
