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Africa Grapples with Critical Levels of Debt Sustainability

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Debt sustainability has become a critical concern across Africa, with 23 countries reaching high-risk levels of debt distress, according to the African Development Outlook 2022. Of the nine low-income countries in global debt distress, eight are in Africa, emphasizing the severity of the situation. Despite international efforts, including the Debt Service Suspension Initiative, the Common Framework, and the IMF’s allocation of $650 billion in Special Drawing Rights, Africa’s debt situation remains precarious.

The impact of the Covid-19 pandemic, coupled with the Russia-Ukraine crisis, has further strained fiscal buffers, leading to increased spending amid revenue shortfalls. The African Debt Managers Initiative Network seeks to address these challenges by fostering collaboration, knowledge-sharing, and innovative approaches to debt management, providing a crucial platform for sustainable economic development in the region.

Sourced from www.afdb.org