AfDB Launches African Debt Managers Initiative Network to Address Debt Challenges

The African Development Bank (AfDB) has taken a significant step towards addressing the debt challenges facing African countries with the launch of the African Debt Managers Initiative Network (ADMIN). The initiative aims to provide tailored and home-grown solutions to the debt issues plaguing the continent.

According to AfDB Institute Director, Eric Ogunleye, the growing financing needs for infrastructure development, poverty reduction, climate change mitigation, and tackling insecurity are driving African countries to increase their borrowing, leading to increased debt vulnerability. Ogunleye highlighted the importance of strengthening debt management capacity in African countries to address these challenges effectively.

The inauguration of the ADMIN network took place in Addis Ababa, with the theme of Developing and Deepening Domestic Debt Markets in Africa. The network aims to support African countries in resolving debt challenges, restoring macroeconomic stability, promoting inclusive growth, and facilitating the exchange of experiences among debt managers in the region.

Former Director of Debt Management at South Africa’s National Treasury, Johan Krynauw, emphasized the need for African countries to collaborate and share knowledge on debt management issues. He noted that Africa has the skills, knowledge, and experience to determine what works best for its countries, underscoring the importance of the ADMIN initiative for public debt managers in Africa to work together.

While the AfDB did not disclose the specific African countries currently facing debt distress, concerns have been raised over Nigeria’s debt profile. With the recent approval of a $2.25 billion loan by the World Bank, Nigeria’s public debt profile has grown to $110.48 billion. The country has seen a significant surge in its foreign debt servicing costs, reaching $2.19 billion by the end of May 2024, nearly doubling the amount spent in the same period in 2023.

The launch of the ADMIN network signals a proactive approach by the AfDB to address Africa’s debt challenges and support countries in managing their debt effectively. Collaboration, knowledge-sharing, and tailored solutions are key components of the initiative, aimed at promoting sustainable debt management practices across the continent.