Africa (Common Wealth) _ According to the head economist for Africa at the World Bank, the future for Africa’s ability to sustain its debt is still “cloudy” because of the challenges posed by poor growth and high inflation to the stability of many of the continent’s economies.
A sort of stagflation gaining hold, according to Andrew Dabalen, is one of the main worries. According to the bank, growth will reach 3.1% in 2023, despite double-digit inflation in several regions of the continent.
The World Bank reports that nearly half of the nations in Sub-Saharan Africa are either in serious debt trouble or are very likely to experience it soon.
In an interview with Reuters, Dabalen stated, “We don’t expect the number to grow beyond what we have now,” although he added that this prognosis was still susceptible to dangers due to the ongoing changes in the global economy.
Ghana joined Zambia as the first African country to default on its debt in late 2017. While Ethiopia’s talks were hampered by a civil war, Chad’s negotiations with its creditors via the G20’s Common Framework procedure ended in November without a debt reduction.
Dabalen stated that the negotiations for Zambia’s Common Framework debt restructuring “keep dragging on” and that the procedure had to be fair to all creditors.
He added that many nations are making the required preparations to put reforms into place that would better serve their long-term goals Domestic reforms would always be preferable to those that were forced by foreign donors.
According to Dabalen, a sizable proportion of the continent’s nations are in the exceptional situation of possessing the mineral resources essential for the transition to a low-carbon future.
Since most of the mineral-demanding nations are in Africa, he explained, “they can really try and maximize revenues to build different kinds of industrialized economies.”
