Emmanuel OchayiIn a concerted effort to confront the mounting debt plaguing the continent, the African Development Bank Group has spearheaded the formation of the African Debt Managers Initiative Network (ADMIN).
This initiative aims to unify experts in devising indigenous strategies to address Africa’s debt predicaments, steering the continent towards responsible borrowing and transparent debt management.
Eric Ogunleye, Acting Director and Division Manager for Policy Management at the African Development Bank’s African Development Institute, emphasized the network’s role in capacity development for African institutions and practitioners during a recent meeting in Abuja.
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“The ADMIN will identify common areas for policy dialogue and capacity building, facilitating interventions by the Bank and other institutions dedicated to public debt management issues in Africa,” Ogunleye stated.
Africa has witnessed a surge in debt vulnerability and distress, with pre-COVID figures highlighting a rapid increase in the continent’s debt burden.
Factors contributing to this surge include a shift towards costly commercial debt and less transparent loan terms, alongside domestic arrears accumulation and rising contingent liabilities from state-owned enterprises.
The African Development Bank has embarked on multifaceted approaches to tackle these challenges. Initiatives like the Public Finance Management Academy for Africa (PFMA) and strengthened collaborations with global financial institutions aim to guide debt management across the continent.
Weak governance, inefficient public investment programs, and undisclosed debt obligations have also been identified as root causes of the mounting debt crisis.
“The ADMIN seeks collaboration with partners engaged in debt sustainability and financial management,” Ogunleye added, underscoring the initiative’s focus on innovative financing, robust debt management systems, and risk assessments.
Highlighting the importance of such a network, Patience Oniha, Director General of Nigeria’s Debt Management Office, emphasized that the similarities among African countries’ debt challenges facilitate shared learning and advancement in debt and financial management practices.
“The African Debt Managers Initiative Network exposes us to more knowledge, skills, and partnerships,” Oniha emphasized.
Despite global financial initiatives aimed at alleviating debt burdens such as the Debt Service Suspension Initiative (DSSI) and the IMF’s allocation of Special Drawing Rights (SDRs), the African continent continues to grapple with critical levels of debt sustainability.
The ongoing impact of the COVID-19 pandemic, compounded by geopolitical crises, presents a looming threat, further depleting fiscal buffers if unchecked.
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