The executive secretary of the United Nations Economic Commission for Africa (UNECA), Claver Gatete, said on Tuesday, May 13, that African countries, including Mozambique, are currently facing serious debt and development crises, stressing that debt needs to be reframed so that it can be an instrument for development.
“Debt, in itself, is not inherently bad, but depends on how it is used. There must be transparency and strengthening of its management, based on a culture of accountability, especially with regard to public enterprises,” he explained.
He called for the implementation of an African rating agency that reflects the realities and growth potential of the continent, along with more innovative investments and green financing, in addition to strengthening the mobilization of domestic resources.
“Africa must have its own solutions. What we need is unified, principled action,” Gatete said during his speech at the African Union conference on debt, held in Lomé, Togo.
The latest report on Africa, published by UNECA at the end of March, stated that one of the main problems in the region was the high level of public debt, which was taking away space for investment in infrastructure that would enable economies to develop.
The publication described how public debt on the continent fell from 62.5% last year to 62.1% this year, after reaching 67.3% in 2023, but that this decline is not enough to eliminate the crisis facing many countries.
“Despite the slight decline, debt levels remain high and are comparable to those recorded before debt relief initiatives in the mid-2000s. Although 2024 has been marked as the year of highest payments, figures will remain well above pre-COVID-19 pandemic levels in the short to medium term.”
According to UNECA, “vulnerabilities will remain high due to high interest rates, volatile public finances, the accumulation of payment arrears, and the prolonged impact of external shocks.”
The agency explained that North Africa leads the index of the highest debt-to-gross domestic product (GDP) ratios, with 76%, followed by Southern Africa, where Angola and Mozambique are located, with 70.7%, while East Africa is the least indebted, with public debt standing at 39.2% of GDP.
