The head of the African Development Bank (AfDB), Akin Adesina, has issued a stark warning that Africa needs faster debt restructuring, more favorable loan terms, and a significant financial boost to avoid a decade of economic stagnation.
Adesina pointed to the continent’s struggles with “long fiscal COVID,” the lingering effects of the pandemic compounded by rising global interest rates. These factors have pushed several African countries into debt default.
“The G20’s Common Framework for debt restructuring needs to be accelerated for Africa,” Adesina said in a speech at Chatham House in London. He emphasized the urgency, stating, “We cannot afford to lose another decade.”
Adesina specifically called for a $25 billion replenishment of the African Development Fund, the AfDB’s branch dedicated to providing concessional loans to vulnerable nations. This would be a significant increase from the record-breaking $8.9 billion pledged for the 2023-2025 funding cycle.
Zambia recently became the first country to finalize a debt restructuring agreement under the G20’s Common Framework. This framework, designed to help developing nations negotiate manageable terms with all creditors, offers a path forward. However, Zambia’s process dragged on for four years, highlighting the need for a swifter approach.
Ghana and Ethiopia are also facing debt defaults, and Adesina warned that 22 African countries are at high risk. He predicts debt servicing payments to reach $74 billion this year, a sharp rise from $17 billion in 2010.
Adesina blames this debt surge on a decline in concessional financing, loans offered at lower interest rates or more favorable terms. “Development cannot be achieved with commercial interest rates,” he argued. “The global financial system must do more for Africa to prevent a widening economic gap caused by the slow post-pandemic recovery.”
