Africa's success hinges on fiscal discipline, political stability and enhanced domestic governance. However, immediate relief lies in creating equitable international partnerships that address the continent's specific needs.
Africa's debt is rising roughly four times faster than its economic growth, jumping 10 percentage points from 2010 to constitute 29% of gross domestic product (GDP) by 2022.
This alarming trajectory demands a rethink of how international partnerships could better support the continent's progress towards the United Nations Sustainable Development Goals (SDGs) by 2030. As the global balance of power shifts, Africa's demographic dividend and resource wealth position it as pivotal in shaping a fair and inclusive multipolar world.
The Organisation for Economic Cooperation and Development (OECD) says a debt threshold range of 70% to 90% of GDP is appropriate for high-income countries such as the US and Japan, and 30% to 50% for emerging economies, including Africa's 46 low- and lower-middle-income economies.
It says a prudent debt target should average 15 percentage points below the debt threshold since exogenous events, like Covid-19 or Russia's invasion of Ukraine, could push up interest rates. So most African countries can only sustain debt levels of 15% to 35% of GDP, it says.
Many African countries have consistently exceeded these levels due to high borrowing costs, currency volatility and slow growth....
