Africa: African public debt will remain above its pre-pandemic level in 2024 and 2025 forcing them to collaborate with international donors to fight against it overindebtedness

Shaken by a succession of exogenous economic shocks such as the covid-19 pandemic, the war in Ukraine and the rise in interest rates on international markets, African countries have seen their average debt-to-GDP ratio reach 62.5%. at the end of 2022.

Africa’s public debt will remain above its pre-pandemic level in 2024 and 2025, requiring greater collaboration with international lenders to prevent the continent’s debt overhang from worsening, the Economic Commission of the Nations said United for Africa (ECA), February 28.

“The public debt of African countries will remain higher than its level before the covid-19 pandemic in 2024 and 2025. This is huge,” said Adam Elhiraika, director of the macroeconomics and governance division at the CEA, during a conference held in the Zimbabwean resort of Victoria Falls.

Recalling that the continent’s debt/GDP ratio had reached 62.5% at the end of 2022, the UN official also called on African countries to better collaborate with international donors to reduce their debts to sustainable levels.

“African countries must collaborate with their international partners to fight against over-indebtedness,” he stressed, indicating that eight countries are already in a situation of over-indebtedness and that thirteen others “risk becoming so”, if nothing is done. is designed to reverse the trend.

Speaking at the same conference, Zimbabwean Finance Minister Mthuli Ncube said he and his African counterparts “plan to formally request an overhaul of the global financial system” to better adapt it to the needs of a continent. facing high debt levels, increasing climate shocks and soaring inflation.

“Access to finance for Africa must be made cheaper and easier. This is why it is necessary to review the international financial architecture to ensure that it is adapted to this objective,” he argued. And added: “the G20 Framework on the treatment of debt and the financing mechanisms for the fight against climate change must be reviewed to meet the needs of Africa”.

Zimbabwe is among African countries struggling with high debt levels. It failed in its obligations to international financial institutions more than twenty years ago. This deprived him of lines of credit. Zambia, Ghana and Ethiopia have also defaulted on their debts in recent years.