The African Development Bank (African Development Institute) has launched the African Debt Managers Initiative Network (ADMIN), a new programme to provide home-grown solutions to Africa's debt challenges.
The inauguration and first peer learning event took place in Addis Ababa under the theme: Developing and Deepening Domestic Debt Markets in Africa.
Director of the Governance and Economic Reforms department at the African Development Group (AfDB), Coulibaly Abdoulaye, said the network would provide tailored and home-grown solutions to the continent's debt challenges.
He said the network would also strengthen the debt management capacity of African countries' officials and institutions to rapidly resolve the debt challenges faced by these countries, restore macroeconomic stability and support inclusive growth, as well as promote the exchange of experiences among debt managers in regional member countries.
African Development Institute's director, Eric Ogunleye, said the growing financing needs for infrastructure development, poverty reduction, mitigating climate change, and tackling insecurity are driving African countries to increase their borrowing, further increasing debt vulnerability.
He said rising debt vulnerability and weak debt management capacity in many African countries have continued to worsen macroeconomic outcomes and hamper effective policy responses to shocks, exacerbating debt distress in some countries.
"There is, therefore, a growing need to strengthen debt management capacity in African countries," Ogunleye told participants.
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As of 30 April 2024, of the 38 African countries for which debt sustainability assessment data is available, 13 countries are at high risk of debt distress and 6 are already in debt distress, Ogunleye said. A larger share of African debt is now owed to external bondholders and creditors outside the Paris Club who deal directly with debtor countries; this high-cost debt imposes a significant burden of debt servicing on African countries averaging 18 per cent of total government revenue, he explained.
The meeting underscored how developing an African domestic debt market has been identified as a way in which the continent can develop cheaper and more stable sources of debt financing for its many development needs.
Discussions focused on sound debt management frameworks, networking, and peer learning to support the development and deepening of domestic debt markets in Africa to promote debt sustainability.
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