The United Nations Economic Commission for Africa (UNECA) has reported that Africa’s sovereign debt has soared to an alarming $1 trillion, pushing the continent into a severe fiscal crisis.
UNECA’s Executive Secretary, Claver Gatete, delivered this warning during the 44th Southern African Development Community Summit in Harare, Zimbabwe, according to a Bloomberg report on Saturday.
Gatete disclosed that more than a third of African countries are either experiencing or at high risk of debt distress.
The crisis, Gatete noted, comes at a time when traditional financial lifelines — such as long-term concessional loans, official development assistance, and foreign direct investment — are in sharp decline.
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“This is causing serious fiscal stress, with more than one in three countries in or at high risk of debt distress,” Gatete told leaders who attended the regional meeting.
“This is also happening as long-term concessional finance, official development assistance, and foreign direct investments are declining.”
Gatete also mentioned that climate change is eroding an average of five per cent of Africa’s GDP annually. Last year, it cost 15 per cent of Mozambique’s GDP, he said.
“That is why we are working on an African position to reform the global financial architecture so that Africa’s needs are taken into account,” he said, referring to concerns that the continent is not treated fairly by multilateral financial institutions such as the World Bank and International Monetary Fund.
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