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The President of the African Development Bank (AfDB), Akinwumi Adesina, has warned that non-transparent resource-backed loans are impeding the economic growth of Nigeria and other African countries.
During the Semafor Africa Summit, held on the sidelines of the International Monetary Fund (IMF) and World Bank 2024 Spring Meetings, Adesina highlighted the challenges posed by Africa’s ballooning external debt, which reached $824 billion in 2021.
Adesina noted that African nations are now dedicating 65% of their GDP to servicing these obligations, with a sharp increase in debt service payments from $17 billion in 2010 to $74 billion this year.
He stressed the need to address the structural issues in Africa’s debt landscape, particularly the lack of transparency and accountability in natural resource-backed loans.
The AfDB President emphasized the importance of debt transparency and accountability to ensure a sustainable debt resolution process.
He called for an end to the practice of opaque loans, which complicates the debt issue and hinders the ability of African countries to achieve economic growth.
In light of fiscal pressures due to the COVID-19 pandemic, infrastructure needs, and rising inflation, Adesina underscored the urgency of addressing these challenges.
He pointed out that the current debt crisis in Africa undermines the continent’s ability to invest in much-needed infrastructure and social services, ultimately hampering its economic growth potential.
The AfDB is actively working to support African countries in their efforts to manage their debt and foster sustainable development.
By advocating for greater transparency and accountability in the debt landscape, the AfDB aims to help African nations navigate the challenges posed by their ballooning external debt and promote economic growth and prosperity.
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