In recent years, a plethora of issues, including rising energy and food costs, climate change, and poor governance, have led to a worsening of Africa’s debt. For instance, Zambia declared bankruptcy during the COVID-19 pandemic after it failed to meet its debt payments. Another country, Ghana, almost went bankrupt in 2022 but was able to avoid it by suspending debt payments. Both nations are negotiating debt restructuring with international creditors, including China, Africa’s largest lender. Meanwhile, other countries are negotiating debt restructuring with the World Bank, the IMF, and other financial institutions to avoid being in a similar situation. However, conflicting interests between China and Western countries complicate debt relief efforts. A recent study recommends a shift in international debt relief policies, supported by the West and China, to resolve Africa’s debt crisis. Also, the World Bank and the IMF have urged reforms to better integrate African nations into global financial systems.
SOURCE: DW
Africa’s Mounting Debt Crisis Calls for Multilateral Solutions
