From the yoke of full economic liberalisation and a sovereign government divesting itself from the business of doing business, a policy shift is urgently required for Africa. Notwithstanding governance challenges, this yoke of policy prescription for decades now, lies undercurrents that engross sub-Saharan Africa countries in respect to slow economic transformation, debt burden, low export base and growth without low numbers and quality of employment.
Africa requires a mix of home-grown and inclusive growth policy regimes as well. At current growth trajectory, how much faster would otherwise African economies grow, say, Uganda, Kenya, Tanzania and Rwanda (East Africa); and Ghana, Burkina Faso, Côte D’Ivoire, Senegal and Benin (West Africa), among others?
By the IMF’s own admission, there are circumstances where African governments’ debt levels are so high that they become unsustainable, such that the scheduled debt service exceeds the capacity to service it. Indeed, multiple African countries are already showing signs of debt-distress, amid huge opportunity cost in allocating more to social services and other investments. Global financial architecture skewed to Western economies, rise in domestic debt are part of the high interest rates and cost of capital. For African public and private enterprises plus African people to achieve a decent welfare, we must see policy reversals to pan-African inclusive economic paradigm and programming.
Debt stressed African countries need urgent attention. Up from six countries over the last half a decade, today, more than 14 African countries are either in/or at risk of debt distress. The 14 countries shoulder a combined sackload of at least $160b (including $90b as external debt). So an-African actor must strive to reverse this haemorrhage from African economies by the rest of the world.
Policy shift is overdue for African private sector and more government enterprise direct role, ownership and management in key sectors/businesses - banks, railways, mines, electricity, telecoms, etc. Then African governments can earn more of their own money for country-specific and regional Africa’s economic development plans. We must take leap improvement of the quality of political leadership in Africa, integration for policy shift to pan-African inclusive economic development astuteness.
Like around East Africa, public debt in Uganda is growing faster than the economic growth. This presents obvious economic performance and sustainability challenges.
Already, from the governments domestic revenues, in FY 2017/18 and FY 2018/19, from every Shs5 collected, at least Shs1 (20 per cent) goes to debt servicing. Uganda Debt Network (UDN) analysis shows that over the medium-term, Ugandans will part with more than half of their domestic revenues to service debt. This calls for a policy shift for improved economies in the African continent.
Ruth Aanyu Epetait,