The Director General for Nigeria, African Development Bank (AfDB), Dr. Abdul Kamara, has called on African nations to take proactive measures in addressing their financial challenges.
He made this appeal during a consultative meeting on the African Financial Stability Mechanism (AFSM) and the Public Service Delivery Index in Abuja.
Kamara highlighted the increasing financial pressures on the continent, noting that development needs are increasing while access to concessional funding and domestic resources is decreasing. This, he said, has caused public debt to grow significantly.
“This year alone, 2024, registered 24 African countries that are either at the risk of high debt distress or are currently in debt distress,” he disclosed.
He warned against over-reliance on past debt relief initiatives like the Heavily Indebted Poor Countries (HIPC) initiative and the Multilateral Debt Relief Initiative (MDRI). According to Kamara, these programs were often lengthy and inadequate in addressing the underlying causes of debt.
“The completion of the heavily indebted poor countries initiative, the HIPC, or the MDRI, took more than a decade to be completed in many countries including Burundi, Central African Republic, Chad, Cameroon, Congo, DRC, Côte d’Ivoire, Guinea, Guinea-Bissau, Liberia, Togo, among others.
“Now, at the end of this month, five of these countries are again at high risk of debt distress. So as Africans, we must therefore find our own solutions to this problem. We cannot rely forever on external solutions,” he said.
He also pointed out that these programs only delay debt payments without addressing the root causes and suffer from minimal involvement by private sector lenders and multilateral institutions.
Kamara presented the African Financial Stability Mechanism as a tool to address these challenges. He urged stakeholders to contribute to shaping its proposals, describing the initiative as a historic opportunity for Africa to reduce its reliance on external aid.
“The task before you is of utmost importance for the continent. It is therefore not difficult to imagine how the problem of rising macroeconomic vulnerabilities impacts public service delivery.
“The discussion of public service delivery index is an important effort to look at ourselves in the mirror as African governments to reflect on how effective and efficient we are in delivering services to our people, but most importantly, how this can be improved going forward.”
He assured participants of the AfDB’s commitment to working with the African Union, member states, and regional organizations to make the AFSM a reality.