African central banks urged to boost international borrowing
Central banks across Africa need to step up international borrowing in order to increase their ability to provide development finance, one expert has argued.Speaking at a finance meeting in Kigali, Rwanda, Director at the Centre for the Study of African Economies at the University of Oxford Professor Paul Collier said many African countries are currently under borrowed and are not taking advantage of potential commercial borrowing opportunities, the New Times reports.
Professor Collier explained that "debt accumulation and the reduction of natural resources were core methods of financing the public infrastructure that is essential for development" in advanced economies, calling on African nations to do the same.
However, some hurdles will have to be overcome in order for this to take place, as attendees at the meeting also noted there is room for improvement of governance and efficiency among central banks.
Rwanda, which has a debt comparable to 27 per cent of its gross domestic product, has sought to raise funds through Government bond sales, with almost Rwf 20 billion (€24 million) generated using this method over the past two years