The President of the African Development Bank (AfDB), Femi Adesina, said that the debt of countries in Africa made up 70 to 75 percent of the Gross Domestic Product (GDP).
He also added that the accumulated debts are not sustainable.
Adesina said this at the launch of the African Economic Outlook 2021 held virtually with the theme, ‘From debt resolution to growth: The road ahead for Africa’.
He said that there is an “illicit capital flow” of $70 billion, with multinational corporations refusing to pay taxes, haemorrhaging the continent of funds.
Adesina said, “The issue of debt is so fundamental because it’s like you are running up a hill but you have a bag full of sand on your back, you can’t go far. The amount of debt that we have is not sustainable.
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“The amount of debt that we have right now is about 70 to 75 per cent of the Gross Domestic Product. It used to be sustainable, but what is even more alarming is the structure of the debt, where the debt right now is largely in the hands of commercial creditors, almost $337bn in terms of high creditors and those that are the private creditors without any type of securitisation for it. That is very worrying indeed.”
He added, “Today, the amount of illicit capital flow is over $70bn; you have multinational companies that are not paying their taxes, we are losing billions of dollars to that. There needs to be a look at that.”
Speaking on the steps taken to mitigate the debt issue, he said that the G20 was working to support “temporary debt relief for developing countries through the Debt Service Suspension Initiative.”
