Amid rising interest rates, inflation, and commodity shocks, the probability of simultaneous debt crises in Africa has increased.
The International Monetary Fund (IMF) estimates that approximately 30 percent of emerging markets and 60 percent of low-income countries may encounter challenges in meeting their debt obligations.
Furthermore, there has been a noticeable transformation in the global credit landscape over the past decade. China and private bondholders have emerged as the primary creditors for low-income economies, rendering traditional debt structures less effective in addressing present-day debt issues.
In light of these circumstances, African countries face the task of navigating these challenges while simultaneously seeking to enhance domestic resources, develop robust capital markets, and secure access to affordable international private capital.
During the Shareholders General Meeting of Africa50, an infrastructure lender, held recently in Lome, Togo, African financial and political leaders explored various approaches to improve financial and credit accessibility.
They unanimously agreed on the need for a fundamental shift and advocated for a re-engineering of the global financial architecture that better suits the unique needs of the continent.