The African Development Bank Group has provided training on debt reporting, management and sustainability in Africa to financial sector experts drawn from several member countries.
The training, the fifth, formed part of executive series organized quarterly by the African Development Institute’s Public Finance Management Academy to strengthen the leadership skills and technical capacities of public finance managers. About 110 participants from 45 African countries attended the training.
Participants commended the training.
Stephen K. Moore, an assistant director for budget at the Central Bank of Liberia, said, “The debt management training was relevant in expanding my exposure to budget allocation efficiency and expenditure commitment controls, reducing expenditure arrears, reducing administrative delays in processing payments, and lowering the risks of deliberate payments deferral and budget line overruns.”
He added that the training was essential. “Liberia and many other African countries are faced with significant challenges in managing their high external debt levels with the limited expertise in debt management practices exposing them to high vulnerability and debt distress,” he said.
Warona Seile, Finance Manager for Revenue at the Botswana United Revenue Service, said the training was timely as African countries are recovering from the Covid-19 pandemic, which depleted public finances.
“The debt management programme raised some important techniques which are to be followed and used when a country intends to raise debts finances whether locally raised debt or internationally raised debts finances, there are some risks attached to each debt type and always long-term public benefits should always exceed risks attached,” she said.
Debt financing, mostly used for major infrastructural projects, requires specific skills and management.
Abdoulaye Coulibaly, African Development Bank Director for Governance and Financial Management, said African countries have continued to face the challenges of low fiscal revenues, illicit financial flows, and weak capacity for public financial management, especially public debt management.
“These challenges have been exacerbated by the COVID-19 pandemic, climate change, as well as financing pressures emanating from conflict and insecurity, which are affecting the ability of countries to meet their development aspirations and reduce poverty,” Coulibaly said. He spoke on behalf of Prof. Kevin Urama, African Development Bank Chief Economist and Vice President for Economic Governance and Knowledge Management.
He said despite rising debt levels, African governments need additional finance to the tune of $432 billion to address the socioeconomic impacts of the Covid-19 pandemic and support recovery in 2022 and 2023. As a result, sovereign debt is expected to remain elevated across the continent at around 65 percent in 2023 and 2024.
Coulibaly said these challenges call for improved capacity for debt management and prudence in public finances while intensifying efforts at mobilizing additional revenues.
Africa’s current public debt is estimated at $546 billion or about one-quarter of the continent’s GDP and higher than combined annual government revenues, which are $501 billion. According to the Bank’s data, the continent’s gross government debt as a percentage of GDP nearly doubled between 2010 and 2020, from 36% to 70%.
The training took place took place from 27th to 30th March 2023.