Public debt managers from 19 African countries, bilateral and multilateral creditors on Wednesday started a three-day meeting in Uganda.
The meeting aimed at ensuring that external borrowing is used to foster sustainable economic growth.
Uganda’s Prime Minister Ruhakana Rugunda said at the opening of the meeting 40% of African countries are in debt distress. Rugunda said an increasingly stabilizing Africa has led to increased external borrowing in a bid to meet the need of fast track development.
Elliot Harris, UN chief economist and assistant secretary-general for economic development, said external financing is increasingly changing shape from concessional financing to private financing.
Harris said that while the changing landscape presents challenges, borrowers need to adjust and look at the opportunities. He said there is a need to increase domestic resource mobilization and also have effective debt management.
He noted that the terms and conditions under which a debt is acquired must be clear from the onset.
According to the World Bank, over the period 2010-18, the average public debt increased by half from 40 to 59 percent of Gross Domestic Product, making sub-Saharan Africa the fast-growing debt accumulation continent.
In June 2019, the World Bank Global Economic Prospect showed that unsustainable accumulation of public debt has become gradually troublesome in the past years.