The United Nations Economic Commission for Africa has said that Africa’s sovereign debt has reached a staggering $1 trillion, plunging the continent into a deep fiscal crisis.
The Executive Secretary of UNECA, Claver Gatete, issued the warning at the 44th Southern African Development Community Summit in Harare, Zimbabwe, as reported by Bloomberg on Saturday.
Gatete revealed that over a third of African nations are either in 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.
“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.
