By Adedapo Adesanya
The Minister of Finance and Co-ordinating Minister of the Economy, Mr Wale Edun, has called for necessary steps to manage ballooning debt and its servicing on the continent.
This is as he expressed gratitude for the continuous support from the African Development Bank (AfDB) at the launch of the Debt Management Forum for Africa (DeMFA) and its inaugural policy dialogue on Monday in Abuja.
According to the African Economic Outlook Report (AEO) 2024, in 2024, African countries are expected to spend around $74 billion on debt service, up from $17 billion in 2010, of which $40 billion is owed to private creditors, representing 54 per cent of total debt service.
The Nigerian finance minister emphasised that the partnership had transformed into a mutually beneficial collaboration over the years, leading to critical grants, loans, and capacity-building initiatives targeted at improving the economic landscape of African nations.
Mr Edun highlighted the significance of the DeMFA, which aims to address public debt challenges on the continent specifically.
He commended the AfDB for establishing the initiative, noting that while the World Bank had provided support in debt management for decades, the launch of a forum dedicated solely to Africa was a welcome development for the 54 countries in the continent.
The minister identified two issues facing African nations: the escalating levels of debt and debt service, which had constrained fiscal space for governments and the limited access to affordable funding in both domestic and international markets.
He said there was an urgency to mobilise large capital pools to tackle social and economic challenges, including unemployment, infrastructure deficits, climate change and meeting the social development goals.
Mr Edun stressed that DeMFA must be structured to build on the foundations laid by previous initiatives, offering a comprehensive approach tailored specifically to the needs and realities of Africa.
The finance minister urged DeMFA to focus on ensuring the long-term sustainability of public debt across Africa.
“As a forum, it must actively contribute to the continuous and sustainable management of public debt, helping nations avoid recurring debt crises and fostering development.
“By working together, we can overcome these challenges and accelerate Africa’s growth trajectory,” he added.
Mr Edun commended the AfDB for its leadership in the initiative and expressed optimism about its potential to transform debt management practices across the continent.
“On behalf of all stakeholders, I wish the AfDB success in this endeavour and look forward to seeing its impact on Africa’s development,” he said.