The President, African Development Bank, Dr Akinwumi Adesina, said the debts owed by African countries, including Nigeria is not sustainable.
Adesina stated on Friday while speaking at the virtual launch of the African Economic Outlook 2021, with the theme ‘From debt resolution to growth: The road ahead for Africa.’
He said the situation has become worrying and needs to be addressed so as to avoid another “lost decade” and build resilient economies.
“The issue of debt is so fundamental because it’s like you are running up a hill but you have a bag full of sand on your back, you can’t go far. The amount of debt that we have is not sustainable.
“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,” he said.
In Adesina’s foreword, he noted, “Global partnership efforts are being made by the G20 to support temporary debt relief for developing countries through the Debt Service Suspension Initiative. However, debt payments are only deferred, and the initiative covers only a small fraction of Africa’s total bilateral debt. Much larger financial support is needed, and the private sector creditors need to be part of the solution. Even more important, the time for one last debt relief for Africa is now.”
Commenting on illicit cash flow in the continent, he said “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.”