African economies capacity to remain resistant to growth – especially the economies of Nigeria, South Africa and Egypt among others, raised serious concerns throughout discussions at the ongoing African Development Bank (AFDB), annual general meetings (AGM) in Lusaka, Zambia.
Although, most stakeholders were tongued tied following perceived effects of the global economic and financial challenges, AFDB President, Dr Akinwumi Adesina reassured participants on the resilience with a caveat.
The caveat, Adesina said would depend on member states ability to seriously to avoid debt crisis.
According to him, the warning became imperative following the current increasing attraction of African countries to maximize the advantage of lower global interest rates to float bonds in the international capital markets.
Available data showed that between 2006 and 2014, African countries issued 26 billion dollars in Eurobond.
In 2015, the African countries Eurobonds appetite further increased with their issuing of 12 billion dollars.
Overall, Adesina concerns in the increasing African countries offshore debt instrument profile revolves around the high cost of financing the foreign currency denominated debt following the rising global interest rates.
AFDB President worry and his message to the large number of member states managers of the respective economy was that an indebted Africa cannot be a rising continent.
He suggested the urgent need for macroeconomic stabilization, fiscal consolidation, broadening on tax and deepening of the domestic capital market.
He urged African countries to look inward and mobilize domestic resources for development.
Specifically, Adesina identified the need to securitize foreign remittance which hit 62 billion dollars in 2014 and leverage the 162 billion continental sovereign wealth.
The other domestic resources demanding effective management, he identified in Africa, are 500 billion dollars annual domestic tax revenue, 20 billion dollars per year private equity funds and the 334 billion estimated yearly pension funds.
He also re-emphasised the urgent political will of African governments to end the annual 60 billion dollars illicit capital flows that limit the continents capacity for sustained development.
Earlier, Dr Carlos Lopez, Executive Secretary, Economic Commission for Africa (ECA), said that economic horizon of the continent was brighter now with AFDB aggressive economic development leadership.
Lopez the new economic agenda unveiled at the ongoing AFDB AGMs provides a veritable platform for convergence of continental economic development using home grown and peculiar resources.
He commended AFDB for decentralising its operations and urged various African countries to effectively utilize the opportunities offer by the continental financial institution.