Local Debt Solutions at the Forefront as AfDB Launches Pan-African Debt Management Forum
The African Development Bank (AfDB) has launched the Debt Management Forum for Africa (DeMFA), a strategic initiative aimed at tackling Africa’s mounting debt challenges. The forum, which was officially inaugurated in Abuja, Nigeria, on December 16-17, 2024, seeks to strengthen technical capacities, improve credit ratings, and reduce debt distress across the continent.
Themed “Making Debt Work for Africa: Policies, Practices and Options,” the launch event brought together key stakeholders, including African Ministries of Finance, Central Banks, debt management offices, and academics. Discussions focused on debt vulnerabilities, restructuring the global debt framework, loan negotiations, credit ratings, and effective public debt management.
Nigeria’s Minister of Finance, Wale Edun, represented by Patience Oniha, Director-General of Nigeria’s Debt Management Office, lauded the AfDB’s initiative, stating, “The introduction of DeMFA is significant as it is focused on public debt. This is a welcome development for Africa.”
Kevin Urama, AfDB’s Chief Economist and Vice President for Economic Governance and Knowledge Management, described DeMFA as a “key milestone” in Africa’s journey toward self-sustained economic growth, emphasizing that “development is a do-it-yourself business.”
The forum is designed to serve as a knowledge-sharing platform, a coordinating hub for stakeholders, and a center for peer learning. According to Eric Ogunleye, Director of the African Development Institute at AfDB, the initiative will “strengthen African technical capacity for debt management and help secure better credit ratings.”
Seth Terkper, Ghana’s former Minister of Finance, moderated a session where he called for a shift in accounting practices to prioritize comprehensive debt management. Harvard University economist and former IMF Chief Economist Kenneth Rogoff highlighted the benefits of borrowing in local currencies to mitigate risks and reduce costs.
Africa’s debt burden has risen sharply, with fiscal deficits increasing from $0.8 billion two decades ago to nearly $150 billion, and debt-to-GDP ratios more than doubling. In 2024, the continent’s debt service cost is projected to reach $163 billion, a stark increase from $61 billion in 2010.
DeMFA is the latest in a series of AfDB-led interventions, complementing initiatives such as the Strategy for Economic Governance in Africa (2021-2025) and the Public Finance Management Academy. The forum is expected to provide policy-level guidance for African leaders and ensure more effective implementation of economic governance strategies.
