Africa's public debt is projected to remain elevated above pre-pandemic levels in 2024 and 2025, with numerous countries still at risk of sliding into debt distress as they struggle to manage international loan repayments, according to Reuters citing a UN official. At a United Nations Commission for Africa conference, Adam Elhiraika, the agency's director for macroeconomics and governance, highlighted that eight countries are already in debt distress, and another 13 are anticipated to face similar challenges. Economic shocks, including the COVID-19 pandemic, Russia's conflict with Ukraine, and increasing US interest rates, have compounded Africa's fiscal woes. The debt-to-GDP ratio stood at 62.5 per cent by the end of 2022, doubling from 57 per cent in the decade leading to 2020. Without a shift in fiscal policies, this ratio could rise by 10 percentage points in the next five years, as per a recent International Monetary Fund report. Elhiraika emphasised the necessity for African nations to collaborate with global partners to tackle debt distress. Last year, Africa's fiscal deficit worsened to 4.6 per cent of GDP and is predicted to widen to 5 per cent in 2024. Many governments are compelled to cut spending while grappling with escalating interest payments. Zimbabwe's Finance Minister, Mthuli Ncube, urged a reconsideration of the global financial system, advocating for more accessible and affordable financing for Africa. Zambia, Ghana, and Ethiopia have already experienced debt defaults since late 2020, underscoring the urgency of addressing Africa's debt crisis.
