APA-Addis Ababa (Ethiopia) Africa has seen increasing debt, financial and climate challenges amid remarkable resilience against a series of shocks, Claver Gatete, Executive Secretary of the United Nations Economic Commission for Africa (UNECA) has said.
A press statement issued by the UNECA on Thursday quoted Gatete as saying that poverty and hunger have been rising over the past five years across the continent amid climate challenges.
“We have seen debt levels increase by over 180 percent since 2010. For Africa as a whole, public debt now amounts to 66 percent of Growth Domestic Product (GDP) and high repayment costs are crowding out essential expenditures on health, education, and climate action,” he said.
He said despite a projected growth of 3.5 percent in 2024, from 2.8 per cent in 2023, growth is not high enough for the continent to fulfill the goals of Agenda 2063.
The executive secretary partly linked the limited growth to global shocks, disrupted supply chains, eroded fiscal space and reduced access to finance.
Recalling that twenty-one African countries are at high risk of, or in, debt distress, Gatete said only two have their credit ratings in the investment grade and three countries of the continent have already defaulted on their sovereign bonds.
According to the executive secretary tax-to-GDP ratio of the continent remained at 15.8 percent and inflation stood at 18.3 per cent in 2023.
“A lack of concessional borrowing is leaving African governments to decide whether to borrow at national level and crowd out the private sector or borrow externally and deal with the challenges of foreign exchanges and exchange rate fluctuations,” Gatete stated.
Indicating that Africa is losing up to $75 billion due to high-risk premiums and unfair credit assessments, Gatete said the continent needs about $3 trillion a year until 2030 in development and financing to reach SDGs.
Noting that ongoing threats of climate change are reducing the fiscal space, costing governments up to 5 percent of GDP annually, the executive secretary further said infrastructure and climate change is estimated to cost the continent between $68 billion and $108 billion.
He said based on the latest data, 476 million people in Africa are projected to live in poverty in 2024.
Gatete, however, is hopeful that Africa still can generate its own solutions, considering that the region is blessed with an abundance of every kind of resource that is demanded globally.
Source: UNECA
