The African Development Bank Group (AfDB) is set to launch the Debt Management Forum for Africa (DeMFA) to help its regional member countries manage their debt productively, responsibly, and sustainably.
The launch of DeMFA will be spearheaded by the African Development Institute (ADI), AfDB’s focal point for capacity development support to regional member countries, scheduled for 16 and 17 December 2024. The forum will also hold its maiden policy dialogue on “Making debt work for Africa: Policies, practices and options”.
According to AfDB, the debt management forum, which is a new platform for high-level dialogue on debt productivity and sustainability at the national, regional, and continental levels, also aims to amplify African voices and perspectives on debt matters and provide a channel for knowledge-sharing, advocacy, and capacity development on debt management.
The financial institution said DeMFA would galvanise partnerships with multilateral and bilateral development institutions, and other critical stakeholders on Africa’s debt situation.
“This inaugural convening of the forum will bring together Africa’s ministers of finance, central bankers, debt managers, policymakers, experts, and relevant stakeholders to exchange views and lessons on challenges related to the continent’s debt vulnerabilities and to identify policy and strategic actions to address complex debt management challenges,” it noted.
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The bank emphasised that the forum is being launched against the backdrop of rising public expenditures, declining domestic revenues, rising debts and debt servicing costs, declining credit ratings, and debt unsustainability and unproductivity on the continent.
The AfDB attributed the root causes of the lingering debt problems to low economic productivity, weaknesses in governance, and internal institutional capacity to mobilise revenues and manage debts productively.
“Also, the reclassification of some African countries from low-income to middle-income countries, preventing them from accessing concessional loans, has contributed to the continent’s debt problem.
“Other factors driving Africa’s debt accumulation are inefficient and large public investment programs and increasing defence-related expenditures due to rising geopolitical conflicts.
“These are exacerbated by negative headwinds from regional and global geopolitics and economic policies, illicit financial flows, climate change and the aftermath of the COVID-19 pandemic,” said the financier bank.
The bank further said DeMFA would augment its existing policy and strategic tools in response to Africa’s debt challenge, including its multidimensional action plan for the management and mitigation of debt distress risks in Africa (2021-2023), the sustainable borrowing policy (2022), strategy for economic governance in Africa (2021-2025), and the capacity development strategy (2021-2025).
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