- Many African leaders attending the ongoing United Nations General Assembly (UNGA) in New York have a common objective
- The leaders who spoke at the UNGA harped on debt forgiveness for Africa to avoid them sinking into debt holes
- According to them, debt forgiveness or restructuring would free resources for them to focus on developing critical infrastructure
The ongoing United Nations General Assembly (UNGA) in New York presented some African leaders, including Nigeria’s president, Muhammadu Buhari, the opportunity to make their positions known on debt cancellations.
Many African countries are burdened with debilitating debt, mostly from European countries and top global lenders.
Huge debt burden on Africa
Reports say that as of 2020, the total external debts owed by African countries amounted to about $702.4 billion, an increase from $380.9 billion owed by African governments.
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At the UNGA meeting in New York, many African countries begged lenders like China, the EU and the International Monetary Fund (IMF) for debt relief which they say is hampering development in the continent.
According to them, a large chunk of their revenue is usually sunk into debt servicing, leaving little for development and human capital development.
African presidents speak
Newly elected Kenyan President William Ruto urged rich countries to open a dialogue with Africa on the debt burden, asking them to review debts owed by poorer African countries.
Ruto said that debts paid by the countries are consuming the meagre revenue accruing to those countries. He asked that the debt burden be lifted to allow poor African countries to develop their resources.
Zambian President Hakainde Hichilema told the BBC that the country’s $1.3 billion debt from IMF was circumstantial, saying it was due to what his administration inherited.
He explained that debt servicing should be relaxed to allow Zambia’s revenue to be ploughed back into the economy to spur development.
Hichilema said servicing $19 billion debt is burdensome, but when lowered and replaced with fair capital, the revenue from debt servicing would go back to revenue regeneration.
Ruto said East Africa is burdened with significant conflicts and changes which impede regional development.
Nigeria’s President, Muhammadu Buhari, called for a review of the eligibility criteria for debt cancellation for developing and the least developed countries in Africa.
In May, Buhari had told EU countries and other global financiers to reconsider loan restructuring or outright cancellation for African countries hobbled by the COVID-19 pandemic.
Debt servicing not Africa's only problem
There have been concerns that some countries in Africa have borrowed beyond their revenue threshold.
In July, Nigeria said it is running short of revenue to maintain debt servicing, leading to a huge budget deficit.
Analysts say Africa’s problems remain the mismanagement of resources and corruption, and debt servicing.
The list of African countries with highest debt to China, amount and what the debts are used for
The world’s greatest economies rank among the 20 countries with the highest external debts.
They are the US, Russia, United Kingdom, France, Germany, Japan and China, according to a Daily Trust report.