Ebenezer Obadare

Africa has a governance crisis, not a debt crisis

When Pope Francis addressed a Vatican conference on “the Debt Crisis in the Global South” in June, he pulled no punches in decrying a problem that he blames for “causing misery and distress, and depriving millions of people of the possibility of a dignified future.” To unburden beleaguered countries, the Pope advocated debt forgiveness in the pursuit of “a new international financial architecture that is bold and creative.”

Pope Francis is not alone in his alarm. A recent Finance for Development Lab report on rising debt in developing countries warns of “catastrophic implications for the world” if the current situation is not arrested.

Nor is the alarm unfounded. African countries’ total external debt, totaled at more than $1.152 trillion by the end of last year, continues to spiral. Not only are more African countries borrowing more, they are drawing credit from more foreign (including private) sources, and using more of their meager internal revenues to service interest on existing loans. According to the African Development Bank Group (AfDB), African countries “will pay out $163 billion just to service debts in 2024, up sharply from $61 billion in 2010.”

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