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Over half (57 percent) of the world’s poorest countries, home to 2,4 billion people, are having to cut public expenditure by a combined $229 billion over the next five years, a new analysis from Oxfam revealed ahead of the World Bank and International Monetary Fund (IMF) Annual Meetings in Marrakech.
The Annual Meetings are returning to the African continent for the first time in 50 years.
Per the report, at present, low- and lower-middle-income countries will be compelled to pay nearly half a billion dollars every day in interest and debt settlement between now and 2029. Entire nations are teetering on the brink of bankruptcy, with the poorest countries now spending four times more repaying debts to rich creditors than on healthcare.
This echoes the observations made in a recent feature article by Kenya’s Ruto and AfDB’s Adesina, that Africa’s debt servicing costs surpass the annual estimated requirement of US$50 billion, as suggested by the Global Centre on Adaptation, for investing in climate resilience, Oxfam analysis describes a US$27 trillion black hole that low- and middle-income countries face to meet climate-related loss and damages, adaption and mitigation measures, along with their health, education and social protection needs.
“The World Bank and IMF are returning to Africa for the first time in decades with the same old failed message: cut your spending, sack public service workers, and pay your debts despite the huge human costs. They must show they can genuinely change to reverse the tide of widening inequality within and between countries,” said Oxfam International interim Executive Director Amitabh Behar.
A historic high number of developing countries find themselves in financial turmoil, with mounting global interest rates, surging inflation, and a string of economic setbacks triggered by the aftermath of the Covid-19 pandemic severely straining their government finances. — Business Insider Africa.
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