Browsing: Africa debt crisis

Africa debt crisis
  • As national debts grow, many African countries find themselves spending more on debt than on health.
  • IMF says the debt ratio in Sub-Saharan Africa surged to 60% from 30% of the countries’ GDP between 2013 and December 2022.
  • Kenya is for instance using nearly 60% of its annual revenues on paying debt obligations.

As the Africa debt crisis roils, over half of the countries have found themselves spending more money in servicing their loan obligations than even the amount they have budgeted for health services to their citizens.

This unfolding scenario is further burdening millions of their citizens who have little choice but to shoulder heavy tax burdens to settle mountains of debt.

Prof Danny Bradlow, a Senior Research Fellow at the Centre for the Advancement of Scholarship in Pretoria, South Africa, captures the dire situation, stating: “over the  last three years (2019/22), more than 25 African governments allocated …

Economic growth in Sub-Saharan Africa (SSA) was projected to retard from 4.1% in 2021 to 3.3% in 2022. Photo/DailyNation
  • The Russia-Ukraine war has impacted Africa’s economic growth by increasing food shortage
  • Africa is facing impending food crisis that will see over 140 million go hungry in 2023
  • Economists remain optimistic Africa can recover against all odds

Economic growth in Sub-Saharan Africa (SSA) was projected to contract from 4.1% in 2021 to 3.3% in 2022, a regression caused by a general global economic slowdown.

Africa’s dependency on long supply chains left it vulnerable to adverse economic conditions in the global market and the global supply end. Covid-19 dealt the world a blow but Africa sailed through the storm, barely.

However, the Russia-Ukraine war disrupted grain and oil supply dumping Africa’s growth prospects notwithstanding that a number of African states are on the brink of a debt crisis.

Also Read: What does Russia’s invasion of Ukraine mean for Southern Africa?

Things were made worse with the ongoing catastrophic effects of global …

South Korea's economic miracle

South Korean industry began with the production of textiles and footwear and then moved into heavy industries like steel, heavy equipment, ships, petrochemicals, electronics, and automobiles by the 1980s.

Africa needs to follow the economic lead of countries like South Korea that developed into advanced states through export-led economic growth and the development of strong domestic economies. South Korea committed to rapid industrialization. This is what caused the economy to take off. However, it is important to note that economic development was also set in motion by leaders who implemented land reform and educational development.

Oxford Research notes, “Industrialization was characterized by a close pattern of cooperation between the state and large family-owned conglomerates known as chaebǒls. This close relationship continued after the transition to democracy in the late 1980s and 1990s but after 1987, labour emerged as a major political force, and rising wages gave further impetus to the …