Bank of Zambia Governor Denny Kalyalya has expressed concern that most countries in Africa are faced with high debt challenges that are negatively affecting their economic growth.
Dr. Kalyalya noted that there is need for continued engagements among leaders to find solutions to the debt crisis for the betterment of the region.
He said most governments have put in place individual measures aimed at addressing the high debt crisis but have failed to achieve the desired results hence the need for them to work together and find sustainable solutions.
Dr. Kalyalya was speaking in Lusaka today when he moderated a session on “addressing the challenges of the rising debt problems in Africa” on the sidelines of the ongoing Specialized Technical Committee meeting of the African Union Finance, Monetary Affairs, Economic planning and integration.
Meanwhile Tunisia’s former Minister of Economy and Finance Hakim Hammounda has called for enhanced collaboration among central banks and economic policy makers in the African region.
Mr. Hammounda said there is need for concerted efforts among members states to ensure that there is structural transformation and coordinated approach to issues of debt management, if the continent is to stimulate sustainable economic growth.
” Right now Africa is at cross roads facing a number of challenges among them is the rising debt, this is why there is need to beef up coordination among central banks, economic policy makers and endeavour to find solutions to address these problems if we are to attract any economic development,” he noted.
African Tax Administration Forum Executive Secretary Logan Wort has advised countries in Africa to enhance their local resource mobilisation as way of addressing the rising high debt levels within the continent.
Mr. Wort observed that only two countries namely Lesotho and Uganda currently have their national budget above the total national debt levels.
He explained that for the rest of the countries, their debt situation is above national budgets, a situation he said should be addressed timely if the region is to expedite it’s economic recovery process from the effects of global challenges.
He added that to this effect countries should restructure their resource mobilisation models by embarking on proper utilization of revenue management system.
” We need to respond to this debt situation urgently and the only solution is to have internally developed effective domestic resource mobilisation and can be done through proper management of revenue collection,” he said.
Earlier, Lusaka Securities Exchange Chief Executive Officer Priscilla Sampa called on governments in the African region to consider attracting local intuitional investors such as pension funds and insurance firms.
Ms. Sampa noted that institutional investors are key players in the financial markets hence the need for governments to take advantage and borrow from them as a way of addressing issues of defaulting owing to high interest rates among other factors attached to borrowing.
She explained that Africa’s debt has continued to grow high interest rates, short durations of payment periods for most bonds issued and the quoting of debt in dominated foreign currency such as dollars and euro.
” I think as African countries we need to introspect, and think about institutional investors like pension funds and insurance, we need to look at the alternative sources of borrowing to deal with factors such as high interest rates and short term duration of most bonds which makes the cost of borrowing to be high, “ she stressed.