The Former Minister of Finance, Ngozi Okonjo-Iweala has raised concern over the rising debt profile of African countries including Nigeria.
In a piece published on Financial Times, Iweala said despite the fact that African countries need China to embrace a low carbon-future, the continent’s rising debt profile is real.
As African countries continue to tap international debt markets and issue record levels of debt in foreign currencies, Iweala reiterated the alarming state of which African countries funding their survival.
According to the International Monetary Fund (IMF), sub-Saharan Africa’s debt to GDP ratio has risen from 26.3 per cent in 2009 to 48.1 per cent. This ratio, according to Iweala, is far higher and in dangerous territory for a handful of countries.
Whilst Chinese debt may not be the biggest contributor to this, Iweala maintained that African countries need to seek a good balance of concessional loans, grants and foreign direct investment, individually and collectively to sustain their development.
Iweala said during her time as Finance Minister of Nigeria, China worked with the country to get a balanced package of assistance that has helped build the light rail system in Abuja and four new airport terminals in Lagos, Port Harcourt, Kano and Abuja, among other projects.
According to the Former Minister, two-thirds of the continent’s infrastructure is yet to be built and Africa can lead with clean, low-carbon sustainable infrastructure. This approach, she said can lay the foundation for a new growth story, one that creates millions of jobs for our youth, one with efficient and liveable cities, restoration of degraded agricultural lands including a halt to deforestation, and clean energy and water resources.
“A new report from the Global Commission on the Economy and Climate, which I co-chair, has found that bold climate action could yield economic benefits worth $26 trillion between now and 2030. Bold climate action could also generate more than 65 million new low-carbon jobs in 2030, equivalent to the entire workforces of the United Kingdom and Egypt today combined.” – Iweala