NAIROBI, Kenya, Jul 22 – The United Nations Conference on Trade and Development (UNCTAD) has issued a warning on debt, urging African countries to find ways of financing development.
According to the Secretary General of UNCTAD Mukhisa Kituyi, governments on the continent should add new revenue sources to finance their development.
Kituyi was speaking during the launch of the Economic Development in Africa Report 2016 which recommends methods such as remittances which have been rapidly growing reaching $63.8 billion in 2014.
It also recommends for Public-Private Partnerships and a clamp-down on illicit financial inflows which is as high as $50 billion per year.
“Africa’s external debt ratios currently appear manageable. However, governments must take action to prevent rapid debt growth from becoming a crisis as it already looks unsustainable in some countries,” Kituyi said during the ongoing UNCTAD 14 in Nairobi.
“Following debt relief under the Heavily Indebted Poor Countries Initiative and Multilateral Debt Relief over the past two decades, external debt in several African countries has tepidly increased in recent years and is becoming a source of concern to policy makers, analysts and multilateral financial institutions,” reads the report.
Figuratively, between 2006 and 2009, the average African country saw its external debt stock grow 7.8 percent per year, a figure that accelerates to 10 per cent in the years 2011-2013 to reach $443 billion of gross national income by 2013.
There’s also the issue of borrowing heavily in the domestic markets, especially in Kenya, Ghana, Nigeria, Tanzania and Zambia.
The findings come at a time when UNCTAD is working to progressively see the developing countries, especially, achieve the sustainable development goals.
“At least $600 billion will be needed each year to meet the Sustainable Development Goals in Africa,” says the report. The amount equates to roughly a third of countries’ gross national income.