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The headquarters of the African Development Bank (AfDB) are pictured in Abidjan, Ivory Coast. Photo Reuters
The headquarters of the African Development Bank (AfDB) are pictured in Abidjan, Ivory Coast. Photo Reuters

AfDB calls for US25bn and better terms to avoid 'lost decade'

Marc Jones and Libby George
Africa needs quicker debt restructurings, more favourable lending terms and some US$25 billion for the Africa Development Fund (AfDB) to avoid a lost decade, the head of the development bank said.

The continent was suffering from "long fiscal Covid" and the world was not doing enough to help it move past the punishing years of the pandemic and global interest rate hikes, which had tipped several countries into default, said Akin Adesina.

"The G20 Common Framework, which is the bilateral and multilateral path to do (debt restructuring), must work faster for Africa," Adesina said in a speech on Friday at London's Chatham House, adding: "We can't afford to have a lost decade."

Adesina also called for a US$25 billion replenishment of the African Development Fund, the concessional arm of the African Development Bank that lends to vulnerable countries.

The last replenishment committed US$8.9 billion for the 2023 to 2025 financing cycle, the largest in its history.

Zambia

Zambia last week became the first country to finalise a debt rework under the Common Framework - the format developed by the G20 to help poor countries renegotiate unsustainable debt with all creditors - including China, which substantially expanded its loans to the developing world in the past decade.

But Zambia's process took nearly four painful years, which its leaders and others have said was too long.

Ghana and Ethiopia are also both in default and Adesina said 22 African countries are at high risk of debt distress, forecasting that debt servicing payments will hit US$74 billion this year, up from US$17 billion in 2010.

Declining

"This is because concessional financing has declined," he said, adding: "You can't do development at commercial rates. We have to make sure that the global financing system delivers more for Africa and avoid economic divergences that are coming about because of slow economic recovery in Africa from Covid."

Adesina later told Reuters that the Common Framework needed to include speedier constitution of credit committees, and also said the Paris Club - the traditional group of mainly Western creditor governments - needed to be permanently expanded.

"The Paris Club was all about concessional lenders. But the world has changed," he said, adding that expanding it was important "because it will allow you to reach a faster dialogue and a resolution".

In 2010, 57% of Africa's debt was from concessional financing, now it is around 25% while the proportion from other commercial lenders and bonds have risen from 17% to 55%. - Reuters

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Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 322.68/OZ DOWN -0.0035 | Copper US$ 4.37/lb DOWN -0.0097 | Zinc US$ 2 883.90/T UP 1.06% | Brent Crude Oil US$ 85.40/BBP DOWN -0.0073 | Platinum US$ 988.42/OZ DOWN -0.0079 Sport results: Weather: Katima Mulilo: 9° | 26° Rundu: 11° | 26° Eenhana: 13° | 28° Oshakati: 12° | 28° Ruacana: 11° | 28° Tsumeb: 12° | 24° Otjiwarongo: 8° | 22° Omaruru: 11° | 24° Windhoek: 7° | 19° Gobabis: 7° | 20° Henties Bay: 16° | 32° Wind speed: 37km/h, Wind direction: E, Low tide: 11:35, High tide: 05:37, Low Tide: 00:11, High tide: 18:10 Swakopmund: 19° | 25° Wind speed: 40km/h, Wind direction: S, Low tide: 11:33, High tide: 05:35, Low Tide: 00:09, High tide: 18:08 Walvis Bay: 21° | 31° Wind speed: 36km/h, Wind direction: SE, Low tide: 11:33, High tide: 05:34, Low Tide: 00:09, High tide: 18:07 Rehoboth: 6° | 21° Mariental: 9° | 22° Keetmanshoop: 11° | 22° Aranos: 8° | 22° Lüderitz: 21° | 32° Ariamsvlei: 11° | 24° Oranjemund: 13° | 29° Luanda: 21° | 23° Gaborone: 10° | 22° Lubumbashi: 9° | 25° Mbabane: 10° | 18° Maseru: 4° | 17° Antananarivo: 11° | 20° Lilongwe: 14° | 24° Maputo: 16° | 24° Windhoek: 7° | 19° Cape Town: 12° | 18° Durban: 16° | 22° Johannesburg: 9° | 17° Dar es Salaam: 21° | 30° Lusaka: 12° | 23° Harare: 11° | 18° Economic Indicators: Currency: GBP to NAD 23.05 | EUR to NAD 19.5 | CNY to NAD 2.51 | USD to NAD 18.23 | DZD to NAD 0.13 | AOA to NAD 0.02 | BWP to NAD 1.3 | EGP to NAD 0.37 | KES to NAD 0.14 | NGN to NAD 0.01 | ZMW to NAD 0.7 | ZWL to NAD 0.04 | BRL to NAD 3.34 | RUB to NAD 0.21 | INR to NAD 0.22 | USD to DZD 134.27 | USD to AOA 853.63 | USD to BWP 13.53 | USD to EGP 48.33 | USD to KES 127.98 | USD to NGN 1479.51 | USD to ZAR 18.23 | USD to ZMW 25.65 | USD to ZWL 321 | Stock Exchange: JSE All Share Index Same 0 | Namibian Stock Exchange (NSX) Overall Index 1785.89 Up +0.14% | Casablanca Stock Exchange (CSE) MASI 13125.47 Down -0.12% | Egyptian Exchange (EGX) 30 Index 26902.4 Down -0.59% | Botswana Stock Exchange (BSE) DCI 9281.23 Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 322.68/OZ DOWN -0.0035 | Copper US$ 4.37/lb DOWN -0.0097 | Zinc US$ 2 883.90/T UP 1.06% | Brent Crude Oil US$ 85.40/BBP DOWN -0.0073 | Platinum US$ 988.42/OZ DOWN -0.0079