Prime
Rising threat of debt distress dominate AfDB meetings
Mr Patrick Ocailap
What you need to know:
- The AfDB meetings are a measure through which member states, Uganda inclusive, can avoid tendencies of debt distress
Deputy Secretary Treasury Patrick Ocailap has said the Annual Meetings of the African Development Bank (AfDB), underway in Kenya, Nairobi will largely focus on mitigating debt distress.
The meeting conducted under the theme: Africa’s Transformation, the AfDB Group, and the Reform of the Global Financial Architecture, seeks to provide technical assistance for efficient management of development projects and programmes as well as promote investment of public and private capital for development in Africa.
Mr Ocailap, who is leading a Ministry of Finance delegation, said the meetings are a quest to look into the African transformation process by taking stock of what has been done in terms of socioeconomic transformation, and portfolio investments in various African countries, Uganda inclusive.
“We are looking at how best to respect the global financial architecture. These meetings are a measure through which member states, Uganda inclusive, can avoid tendencies of debt distress because after Covid-19, Ebola and then the vast impacts of climatic change, various economies have borrowed massively amid an increase in interest rates, which is bringing problems for some countries,” he said.
Rising public debt remains a challenge across Africa with several countries facing repayment tests.
In Uganda public debt has been growing, thus constraining domestic revenues, for which out of every Shs100 collected, Shs30 or 30 percent goes into debt serving.
This, therefore, means that Uganda, just like many other countries across the continent, continue to grapple with mobilizing enough resources to fund priority sectors such, among which include healthcare, agriculture and education.
Mr Ocailap said debt accumulation has been very rapid across sub-Sahara Africa, amid an increase in interest rates, which he said had placed a huge debt and servicing burden on AfDB member states.
AfBD has strategized on supporting member states to deal with the challenges of financing development needs at a pace that limits accumulation of debt, especially due to commercial lending.
