Aug 18, 2024 03:36 PM IST

African countries have over $1 trillion in sovereign debt outstanding, with some member states struggling to meet payments, a United Nations agency official said.

Claver Gatete, executive secretary for the United Nations Economic Commission for Africa, said the continent is facing several challenges in the areas of financing, security and climate change.

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This is “causing serious fiscal stress with more than one in three countries in or at high risk of debt distress,” Gatete told leaders attending a regional meeting of the Southern African Development Community, at Zimbabwe’s Parliament. “This is also happening when long term concessional finance, official development assistance and foreign direct investments are declining.”

African countries including Ghana and Zambia have reached agreements with holders of its dollar bonds after years of negotiations under the Group of 20’s Common Framework. Ethiopia, meanwhile, plans to resume negotiations with its bondholders in the coming weeks, after sealing a landmark deal with the IMF last month.

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Gatete also said climate change is eroding an average 5% of Africa’s GDP on an annual basis. Last year, it cost 15% of Mozambique’s GDP, he said.

“That is is why we are working on an African position to reform of the global financial architecture so that Africa’s needs are taken into account,” he said, referring to concerns that the continent is not treated fairly by multilateral financial institutions such as the World Bank and International Monetary Fund.

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