Adesina warns African countries about international borrowing – Report

The President of the African Development Bank (AfDB) has warned African governments to steer clear of international borrowing, indicating that the economic down turn caused by the fall in commodity prices and slow down in China will continue for up to three years, the Financial Times has reported.

Dr. Akinwumi Adesina, told the FT that Africa is currently grappling with its worst economic slump in more than a decade, urging the governments to boost tax revenue.

Among other things the Bank notes that African governments sold $12 billion of Eurobonds in 2015, compared with about $26.5 billion between 2006 and 2014.

“The weakness of many African currencies has meant debt service costs have soared in local currency terms, while several commodity producers are battling foreign currency shortages,” the report said.

Ghana alone sold more than $3 billion of Eurobonds since 2007.

Adesina who became the President of the AfDB in September 2015 is of the view that Africa cannot continue to act slowly, in addressing her development needs.

“Africa must move faster like the leopard,” he had said at the Annual Meetings of the Bank held in Lusaka, Zambia.

Believing that Africa can achieve a lot with energy, the AfDB says it is investing $12 billion in energy funding over the next five years, attracting up to four times as much from other financiers in the process.

“Africa needs energy for three things; to light up the continent, to power industry and for clean cooking. The continent needs both green based power and off-grid, and we are helping countries in terms of reforms and finance,” Adesina said.

By Emmanuel K. Dogbevi