As Cyril Ramaphosa, the President of South Africa, rightly stated just recently about the “dark economic clouds” afflicting the African continent. He added that the debt burden is crushing economic growth prospects. At the press conference, he particularly highlighted the need for less conventional, strategic financial solutions. He’s adamant about relieving some of these pressures and providing sustainable development benefits across the continent of Africa.
Africa’s economic landscape is still defined by an unprecedented level of indebtedness. The Free State, like many other nations on this continent, has obligations it cannot possibly afford to repay. This could prove to be the single biggest threat to our economic stability and growth. We are in an incredibly dangerous place on the continent. It fails to make sufficient investments in frontline sectors like healthcare, education, and transportation infrastructure.
President Ramophosa acknowledged the deep toll of the burden of debt. It is a toxic poison that doesn’t just suffocate individual nations but suffocates regional cooperation and integration. Faced with shrinking fiscal space, governments find it hard to adopt and implement policies that secure and build their economic resilience. We were encouraged by the President’s call for solutions-focused partnerships between African leaders to address these challenges together.
Beyond his specific comments on debt, there were several aspects of Ramaphosa’s speech that called for greater international assistance. He explained that external support, including debt relief, could be fundamental in providing African countries the space to address their financial challenges. By securing favorable loan terms and attracting foreign investment, nations can work towards revitalizing their economies and reducing reliance on debt.
One of the topics of the President’s remarks was domestic resource mobilization. Dakar – African countries must strengthen their capacity to mobilize domestic resources, Senegal President Macky Sall stressed. Through just tax systems and combating IFFs, this is entirely doable. Strengthening these areas would provide governments with the necessary resources to finance development projects and reduce their dependence on external borrowing.