The African Development Bank (AfDB) has raised concerns over the slow and challenging debt resolution process for Ghana and other debt-distressed African countries.
Despite the G20 framework’s efforts to harmonize official creditors and commercial lenders, the AfDB argues that the debt treatment architecture remains cumbersome.
At the 59th AfDB Annual Meetings in Nairobi, Kenya, Dr. Akinwumi Adesina, President of the African Development Bank Group, emphasized the need for reforms in the global financial architecture to provide more effective debt resolution mechanisms for Africa.
“I understand it takes a long time; it’s a very difficult process because you have Paris Club members, non-Paris Club members, and commercial lenders with differing needs. But the framework has helped—it’s aided Chad, Zambia, Ghana, and is currently working on Ethiopia. However, everyone agrees the process is too slow,” Dr. Adesina remarked.
Dr. Adesina also referenced the 1990s, when many African countries, despite benefiting from multilateral debt relief initiatives like the Highly Indebted Poor Countries (HIPC) initiative, lost a decade of economic progress due to inadequate debt negotiation options.
Using a personal analogy, he stated, “If you have to help someone that is bleeding and you want to save their life, stop the bleeding faster, because by the time you actually do it, they may be dead.”
He highlighted that African countries are calling for quicker implementation and execution of global debt mechanisms to address their financial issues more effectively.
The 59th annual meeting of the African Development Bank, themed “Africa’s Transformation, the African Development Bank Group, and the Reform of the Global Financial Architecture,” aims to provide a platform for discussing the challenges facing African economies and examining necessary structural reforms in the International Financial Architecture.
Over the next few days, heads of governments, central banks, and other multilateral institutions will convene to discuss the issues affecting the African economy. This statutory meeting will also review the AfDB’s performance in the past year and set a new outlook with relevant decisions and resolutions.
Additionally, climate adaptation and increased agriculture financing are key agenda items, as the AfDB emphasizes that these measures are crucial for promoting sustainable growth in Africa.
