Africa-Press – Eswatini. Eswatini is yet to fall into the debt distress trap as compared to most African counterparts but the country cannot rest on its laurels.
That is the general feeling during the ongoing media workshop organised by AFRODAD in Nairobi, Kenya. African Forum and Network on Debt and Development (AFRODAD) is a Pan-African organisation committed to assisting the long-term development of the continent through contributing to finding solutions to Africa’s challenges in debt, resources management and financial development.
AFRODAD and partners are hosting the AFRODAD Media Initiative (AFROMEDI) to build capacity of journalists on debt and development. Business journalists from 20 African countries have been invited to the three-day workshop running from yesterday until tomorrow. Eswatini currently does not appear in the list of countries in debt distress and at high risk. Nations in distress include Ghana and Mozambique that have a debt ratio of over 70 per cent. Eswatini’s debt to gross domestic product(GDP) ratio was recorded at about 40 per cent in the past month. According to AFRODAD, for countries under moderate to low risk of debt, the aim is to support reporting that should enable them to continue improving and maintaining their debt sustainability status.
In a 2021 report, AFRODAD had reported public debt as a double edged-sword. If used for productive purpose and responsibly it supports sustainable development. “African countries have been accumulating increased amounts of debt while the quality of public institutions and debt management policies have deteriorated,” highlighted the report.
Risk
For the majority of countries that are at high risk and already in debt distress in Africa, debt transparency has been a major factor. For instance, in Mozambique the discovery of secret loans resulted in loss of credibility to the government. International Monetary Fund (IMF) stopped further disbursements and rating agencies downgraded the country. “Similarly, in Zimbabwe, the government failed to account for disbursed loans during the early 2000s which resulted in International Financial Institutions, stopping further disbursement,” highlighted the report.
Meanwhile, citizens in most highly indebted countries are said to have little trust for their governments because they do not seem to participate in debt contraction and benefit from such resources which further affects voluntary, payment of taxes making it difficult to service the public debt. “Transparency in debt management will also be essential for countries to recover from COVID-19 induced depression where most countries borrowed further pushing public debt to 100 per cent,” said AFRODAD.
Africa as a whole is said to be threatened with debt crisis. Gross government debt is said to be on a consistent rise in the African continent. It rose from US$192 billion (about E2.8 trillion )in 2000 to over US$1.5 trillion (almost E22.5 trillion in yesterday’s exchange rate) in 2020. Meanwhile, Jason Rosario Braganza, who is AFRODAD’s Executive Director, dubbed journalists as comrades in the fight for social and economic justice. He was speaking during the opening ceremony of the media workshop yesterday.
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