African Development Bank Urges Swift Debt Restructuring and Increased Aid Amid Pandemic Fallout

London, June 7 (Reuters) – Akin Adesina, head of the African Development Bank, called for expedited debt restructurings, improved lending terms, and a $25 billion injection into the Africa Development Fund to avert a lost decade for the continent.

In a speech at London’s Chatham House, Adesina highlighted Africa’s struggle with prolonged fiscal challenges exacerbated by the COVID-19 pandemic and global interest rate hikes. He emphasized the urgency for the G20 Common Framework to accelerate debt restructuring processes, cautioning against prolonged economic setbacks.

Adesina also urged replenishing the African Development Fund, citing the need for concessional financing to support vulnerable nations. Despite a record $8.9 billion commitment for the 2023-2025 financing cycle, he stressed the imperative for additional funding to address escalating debt distress.

While Zambia recently finalized debt restructuring under the Common Framework, Adesina criticized the prolonged nature of the process, citing the need for swifter resolutions. With Ghana, Ethiopia, and 22 other African countries facing debt distress, he emphasized the urgency of addressing mounting debt servicing payments, projected to reach $74 billion this year.

Adesina underscored the decline in concessional financing and emphasized the necessity of recalibrating the global financing system to better support Africa’s development needs. He advocated for reforms within the Common Framework and proposed expanding the Paris Club to facilitate faster dialogue and resolutions in addressing Africa’s debt challenges.

Highlighting shifts in Africa’s debt composition, Adesina emphasized the increased reliance on commercial lenders and bonds, underscoring the need for sustainable financing models to drive Africa’s development agenda.