UNCTAD Economic Development Report in Africa 2016 Launched

UNCTAD Economic Development Report in Africa 2016 Launched

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The United Nations Development Programme (UNDP) in collaboration with partners recently launched the United Nations Conference on Trade and Development (UNCTAD) annual report covering relevant themes in the areas of development.

The 2016 Report entitled “Debt Dynamics and Development Finance in Africa”, examines some of the key policy issues that underline Africa’s domestic and external debt and provides policy guidance on the delicate balance required between financing development alternatives and overall debt sustainability.

The report makes relevant and actionable policy recommendations that addresses the roles those African governments, external partners and the international community can play in ensuring that Africa’s public debts remain sustainable.

In her launching statement, Ms. Ade Mamonyane Lekoetje United Nations Development Programme country representative in The Gambia, welcomed participants and partners on behalf of the UNCTAD Director General and UN Country Team in The Gambia to the launching of the report.

She said that Africa needs substantial financial resources to achieve its development objectives at a time when the global development finance landscape is quite challenging, with official development assistance declining as a share of total external flows and the costs of external debt rising.

Ms. Lekoetje maintained that there is a need to place greater emphasis on the mobilisation of domestic resources.

According to her, meeting the Sustainable Development Goals (SDGs) will require an estimated $614 billion to $638 billion per year across Africa. “Since this is unlikely to be covered by official development assistance (ODA) and external debt alone, the role of domestic debt has gained prominence as a method of financing development. Although Africa’s external debt ratio currently appears manageable, their rapid growth in several countries is a concern and requires action if a recurrence of the African debt crisis of the late 1980s and the 1990s is to be avoided,” she added.

In 2011–2013, she went on, Africa’s external debt stock grew rapidly at 10.2 per cent per year on average.

“During this period, the annual average external debt stock of Africa amounted to $443 billion or 22.0 per cent of gross national income (GNI),” she disclosed.

Madam Ade affirmed that in 2011-2013, The Gambia’s average external debt stock amounted to $504 million, and grew at an annual average growth rate of 4.8 per cent during that period.

The UN Rep noted that in recent years, several African countries have looked increasingly to domestic sources when expanding their net borrowing and have adopted policies aimed at developing domestic debt markets with the active support of international financial institutions and other international organisations.

Considering the increased need for financing for development, the UNDP Country rep noted that regions need to consider tapping into complementary sources of finance, beyond external and domestic debt.

“There is a wide range of complementary modalities of development finance, which, if effectively used, may contribute to meeting Africa’s financing needs. Such modalities include, but are not limited to remittances, curtailing illicit financial flows and public–private partnerships (PPPs).”

by Samba Jawo