The African Development Bank (AfDB) at the weekend said despite the challenges, Nigeria’s and other African countries debts are still under control.
Nigeria’s debt profile stands at N23trillion, but the bank, in its West Africa Economic Outlook 2019, said the servicing of the country’s external debt took about 50 per cent of the country’s revenue.
AfDB’s Director of Service Delivery, Performance Management and Results, Simon Mizrahi, said Africa’s debt has increased in recent years “but not to unsustainable levels.”
He however called for caution, saying: “We need to continue to generate financing and spur growth without increasing debt.”
Sharing insights on Africa’s path forward, Mizrahi underscored the need to harness the continent’s incredible potential in renewable energy.
‘’Africa is the most vulnerable continent and suffers the most from climate change.
“With the right vision, investments and political commitments, Africa can lead a global energy revolution and leapfrog to renewable technologies. This is why the bank is putting its money where its mouth is and investing more than any other development b ank in helping the continent transition towards more resilient and sustainable economies,” he said.
The bank’s Group Treasurer, Hassatou Diop N’sele, said the continent, however, remained strong with growing operating revenues with allocable income generated since 2010 reaching $2.5 billion.
Last year, the bank earned $214 million in allocable income, 48 per cent of which has been reinvested in the institution to reinforce reserves and its business growth capacity. The bullish numbers were revealed during the AfDB’s financial presentation as part of highlights of the 2019 Annual Meetings of the Bank underway in Malabo, Equatorial Guinea.
During the presentation attended by delegates, governors, executive directors and AfDB workers, N’Sele said the bank could chart a new path on account of its ability to raise funds on the capital markets. “The amount of infrastructure financing covered by private sector could double if African countries harness the full potential of their capital markets,” N’Sele said.
N’sele said many African countries could save as much $1 billion on a 20-year loan, if they borrow from the AfDB, instead of from the Eurobond market, due to preferable lending rates.
Delegates were informed of the bank’s successful issuance of the first-ever NOK social bond sold in Norway and sealed last year.
According to Mizrahi, the African Continental Free Trade Area (AfCTA) paves way to the world’s largest free trade area with an integrated market of 1.3 billion consumers.
“This is important because Africa will struggle to be competitive at the global scale, if it continues to operate as 54 fragmented economies. The continent needs to be more integrated, it needs larger economic spaces so that Africa can attract more investors, create more and better jobs, boost internal trade and create continent-wide value chains that are globally competitive,” Mizrahi said.
N’sele expressed the bank’s appreciation for Canada’s unwavering support to the institution with the recently-announced $1.1 billion callable capital.
