{"id":1100064,"date":"2022-05-26T11:57:45","date_gmt":"2022-05-26T11:57:45","guid":{"rendered":"https:\/\/www.ghanamma.com\/2022\/05\/26\/sovereign-debt-remains-threat-to-africas-economic-recovery-afdb-report\/"},"modified":"2022-05-26T11:57:45","modified_gmt":"2022-05-26T11:57:45","slug":"sovereign-debt-remains-threat-to-africas-economic-recovery-afdb-report","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2022\/05\/26\/sovereign-debt-remains-threat-to-africas-economic-recovery-afdb-report\/","title":{"rendered":"Sovereign debt remains threat to Africa\u2019s economic recovery\u2014AfDB Report"},"content":{"rendered":"

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\n Accra, May 26, GNA – High public debt is threatening recovery efforts on the continent and hindering the prospects of high and sustainable economic growth, the 2022 African Economic Outlook has indicated.<\/p>\n
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The report released by the African Development Bank (AfDB) also noted that although Africa\u2019s debt-to-gross Domestic Product (GDP) ratio is estimated to stabilise around 70 per cent in 2021 and 2022, from 71.4 per cent in 2020, it will remain above pre-pandemic levels.<\/div>\n
This is despite growth recovery and debt relief initiatives such as the Debt Service Suspension Initiative (DSSI), the Common Framework, and the International Monetary Fund\u2019s general allocation of $650 billion equivalent in Special Drawing Rights (SDRs).<\/div>\n
According to the report, even though these initiatives have helped alleviate liquidity pressures in many countries by boosting external buffers, they have not erased debt vulnerabilities as 23 African countries were either in or at risk of debt distress as of February 2022.<\/div>\n
\u201cAfrican countries need to accelerate governance reforms and improve public financial management if they are to decisively address their recurrent debt vulnerabilities\u201d it stated.<\/div>\n
It further encouraged additional structural reforms such as debt restructuring, and reprioritisation of public spending to ensure long-term debt sustainability.<\/div>\n
According to the report, domestic policy response on the continent has been constrained by limited fiscal space amid growing social sector spending pressures.<\/div>\n
It, therefore, noted that reconfiguring the global debt relief architecture, including reinstating the DSSI, would be crucial in supporting debt-ridden African countries\u2019 transition toward a path of sustainable debt in the medium to long term.<\/div>\n
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This, it said, would require the building of strong budget institutions to efficiently mobilise domestic resources, conduct sound public expenditure, and implement rigorous debt management and budgeting.<\/div>\n
It also highlighted that a reconfigured DSSI and Common Framework will limit the impact on Africa\u2019s public debt from currency depreciation due to the global uncertainty stoked by the Russia\u2013Ukraine conflict and spillover effects of the tight monetary policy stance being implemented in advanced economies.<\/div>\n
\u201cReinstate and reconfigure the DSSI and Common Framework and scale up efforts to accelerate governance reforms and strengthen public financial management to deal with the structural challenges of Africa\u2019s rising public debt\u201d it recommended.<\/div>\n
It added that \u201cIt is therefore imperative that the global community rethink terminating the DSSI<\/div>\n
framework, which was designed to provide temporary relief to countries facing growing debt overhang\u201d.<\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

Accra, May 26, GNA – High public debt is threatening recovery efforts on the continent and hindering the prospects of high and sustainable economic growth, the 2022 African Economic Outlook has indicated. The report released by the African Development Bank (AfDB) also noted that although Africa\u2019s debt-to-gross Domestic Product (GDP) ratio is estimated to stabilise […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[72],"tags":[2219,1580,3010,15020,2403,1584,15021,513],"class_list":["post-1100064","post","type-post","status-publish","format-standard","category-business","tag-africas","tag-debt","tag-economic","tag-recoveryafdb","tag-remains","tag-report","tag-sovereign","tag-threat"],"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1100064","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/comments?post=1100064"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1100064\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/media?parent=1100064"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/categories?post=1100064"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/tags?post=1100064"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}