The African Development Bank has warned African countries against rushing to take on more debt, saying Africa risks falling into a debt crisis.
Instead, the President of the African Development Bank, Akinwumi Adesina, says countries should look into domestic sources of financing. He was speaking at the opening of the 4th edition of the African CEO Summit held in Abidjan, Ivory Coast.
African nations have rushed to the international markets to borrow in order to plug financing gaps for new infrastructure.
African countries issued bonds worth more than $25 billion in the last ten years.
Financial experts are worried that the continent could slip back into a debt crisis as global interest rates rise; local currencies depreciate and demand for Africa's natural resources slump.
Adesina says, “We should look inside. We should mobilise our own capital and we should have our own macroeconomic stabilisation, fiscal consolidation and expandable taxable base. The future of Africa lies not outside; the future of Africa lies in Africa."
According to Dr. Martyn Davies from Deloitte, “What we have to see now from Ghana, Nigeria and South Africa is austerity, cut backs in government spending and budget cutbacks."
Meanwhile, the African Development Bank says it will invest $12 billion in the next five years towards the electrification of Africa. Six hundred and thirty million of the continent’s one billion people have no electricity. Adesina says, "Without electricity, Africa cannot go anywhere. It is like the blood in your body; you have to have it to have life and if you do not have it, you do not have life."
The Africa CEO Forum brings together some of Africa's top business leaders to network and grow the African private sector footprint in the continent's development.
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