The commodity price crash of 2014 threw to 10 out of the 14 countries that used natural resource backed loans into serious debt problems.
What needs to be done to tackle Africas debt
First, given the diverse nature of creditors, most now outside of the ParisClub, it has become more complex to address debt treatment, debt restructuring and debt resolution.
As a result, the external debt service payments due for 16 African countries will rise from 21.2billion in 2022 to 22.3billion in 2023.
The structure of Africas debt has changed dramatically in the past decade or more, accentuating a trend that started in the mid2000s.
I would like to discuss five trends.
First, nonParis Club bilateral creditors and commercial creditors are increasingly becoming major sources of Africas sovereign debt.
This is due to several factors the carryover effects of the Covid19 pandemic on economies and their fiscal space which led to downgrades of several countries the rising costs of energy and food prices from the RussianUkraine war and the rising costs of adapting to climate change.
With the tightening of monetary policies in the US and Europe, interest rates have risen, leading to rising costs of debt servicing.