AfDB representative eases concerns about debt crisis in Africa
Countries on the continent are still at sustainable debt levels to GDP ratios.An African Development Bank (AfDB) official has eased concerns about a potential debt crisis in Africa, at least on the short term.
"We should not be alarmed that debt crisis is looming in Africa. Countries are still at sustainable debt levels to GDP ratios, but this does not mean that countries should continue borrowing so much without controls", AfDB chief economist in Uganda Alex Rwabizambuga told The Monitor.
Speaking during the Collaborative Africa Budget Reform Initiative (CABRI) workshop on strengthening Uganda's public debt management capabilities, he said that in the financial year 2016/17, the ratio of Uganda's public debt to GDP is projected at 37 per cent, Kenya's at 52 per cent, Tanzania's at 37 per cent and Rwanda's at 34.9 per cent.
The pace at which public debt has increased in most African countries has been significantly higher in the recent years, driven by the issuance of bonds on regional and international markets to finance infrastructures and balance budgets.
The CABRI workshop is being attended by both government officers from Kenya, Malawi, Rwanda and South Africa, Capital Markets Authority and representatives from the private sector.
The managing director Stanbic Bank, Mr Patrick Mweheire, said currently there is a lot of emphasis on debt, but little focus on savings.
"The level of saving in these countries is still very low, so we should emphasise domestic saving," he said.