Muhammad Karkouti writes: Huge African debt

There are signs of a growing crisis regarding the African continent’s debt, which ended last year at around $2 trillion. Especially since it has increased 183% since 2010. The issue is not new, but it is getting worse, and there are no quick fixes for it. In addition, the issue is not limited to continental countries, but it includes large numbers of developing countries and those defined as poor.
But Africa’s debt and its burdens carry the seeds of a future crisis. The settlements between the debtor countries and the creditor parties are not extensive or active enough to reduce the aforementioned crisis, while the interest to be paid ​​​​​​on these debts exceeds the high levels of the contributions of the countries for health, education, climate and housing, which increases the intensity. of internal tension here and there, which… It can turn into serious problems.
What contributed to the increase in the debt of the African continent is the huge financial burdens that the pandemic “Corona” brought to the international scene in general, together with the long wave of inflation . In addition to halting growth during the spread of the pandemic, African countries were forced to borrow heavily to finance the importation of medicines, protective materials and vaccines. These burdens have not decreased even as a result of a series of aid provided by donor countries, including reducing the cost of debt, and reorganizing some of them with the G20 countries.
The strictest aspect, of course, is limited to loans provided by independent commercial creditors, which are not connected to the debt system provided by well-known international institutions. According to the Organization for Economic Co-operation and Development, many countries on the African continent have been “shaken” by large debts from the aforementioned parties, especially because they charge high interest rates and tight situations too.
There is no doubt that the most important factor in resisting any consequences of these debts is to be limited to the debtor countries achieving reasonable levels of economic growth, as well as the fact that they need to rationalize public spending as much as possible, and not use it. private creditors. It is not an easy process, and requires international cooperation, high-quality African economic plans, and the building of more trade relations that provide export resources that provide the growth needed. Not forgetting that rising debts accumulate high interest rates, to the extent that some African countries increased the interest on their bonds by 500% in the recent period.