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African policymakers will address the continent’s spiraling debt crisis during three days of talks that start in Togo’s capital Lomé on Monday.
Africa will pay nearly $89 billion to service external debt this year, according to the ONE Campaign, a US-based advocacy group. The debt service bill amounts to about a quarter of Africa’s combined GDP in 2023, up from about 15% a decade ago.
The talks, convened by the African Union, will enable policymakers to compare notes on their debt management experiences amid “signs that the region has taken lessons” from recent defaults in Ghana and Zambia, said economist David Omojomolo of London-based firm Capital Economics.
Western aid cuts “might lead to pressure on governments to borrow more” as they try to replace lost aid funding which supported health and education budgets, Charlie Robertson, of asset management firm FIM Partners, told Semafor. He said that funding won’t be cheap but African countries have learned that cheaper, more competitive currencies can reduce real interest rates, lowering the risk of debt defaults.
