cover image: POLICY - BRIEF PAPER



14 May 2024

A country is considered to be “in debt distress” when the present value of debt to GDP and exports ratio and debt service ratios significantly breach the respective thresholds, and there are actual or impending debt restructuring 5 US$Billions Africa’s debt crisis requires an in-depth understanding of the drivers of rising debt burdens and the implications of high debt burdens. [...] During the Seventh General Capital Increase (GCI-VII) and the 15th Replenishment of the African Development Fund (ADF-15), the Bank committed to revising its NCDA Policy.17 The review of the NCDA Policy showed that the policy measures and incentives were ineffective in significantly impacting the debt-related public policies in the African Development Fund (ADF) recipient countries. [...] The main goal of the DSSI was to allow poor countries to concentrate their resources on fighting the pandemic and safeguarding the lives and livelihoods of millions of the most vulnerable people. [...] The Agenda recognises domestic resource mobilisation (DRM) as a vital source of financing the Agenda’s seven aspirations, which include economic prosperity founded on inclusive growth and sustainable development.36 The Agenda recognises the negative impacts of the Bretton Woods Agenda and the implementation of Structural Adjustments on the contraction of African economies and increased debt burden. [...] 27 The DSA/DSF policy ignores the varied nature of the African debt landscape, which should inform the provision and use of a weighted average of the various debt types to determine a true picture of debt sustainability.
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