Chronicle Editor
Oliver Kazunga, Senior Business Reporter
THE African Development Bank (AfDB) says the risk of debt defaults among countries on the continent is rising on the back of containment measures against the Covid-19 pandemic.
The regional financial institution said this in its Strategy for Economic Governance in Africa (SEGA) that was launched last Friday. It noted that African countries have developed debt vulnerabilities due to decline in economic output, which was engendered by certain policies and measures to curtail Covid-19 with public debts exceeding 50 percent of Gross Domestic Product.
“Declining economic output as a result of containment measures against Covid-19 and policy measures to stimulate the economies have heightened debt vulnerabilities,” said AfDB.
“Public debt now exceeds 50 percent of GDP in nearly half of its regional member countries.
“Over the last decade, Africa increased its debt at a faster rate than any other region.”
The regional financier said the risk of defaults on debt, much of which is now non-concessional, has increased.
“At least 24 African countries have applied for the Paris Club–led Debt Service Suspension Initiative, which would free up resources to fight the pandemic,” it said.
– @okazunga
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