Former Vice President Prof. Yemi Osinbajo Has Called For Increased Debt Forgiveness For African Nations, Citing The High Cost Of Borrowing As A Key Factor Driving Many Countries, Including Nigeria, Into Severe Debt Crises. He Noted That The Heavy Debt Burden Hinders Africa’s Ability To Invest In Climate-Positive Initiatives Essential For Transitioning To A Green Economy.
Speaking At The 23rd Chief S.L. Edu Memorial Lecture Organized By The Nigerian Conservation Foundation (NCF), Osinbajo Emphasized The Need For Structural Financial Reforms To Address Africa’s $824 Billion Total Debt, As Reported By The African Development Bank (AfDB). The Bank Estimates That African Nations Will Require $10 Billion Annually For Debt Refinancing From 2025 To 2033, With Debt Servicing Reaching $74 Billion By 2024.
While Osinbajo Acknowledged That Borrowing Can Drive Growth When Tied To Productive Projects, He Urged Developed Nations And Global Financial Institutions To Consider Debt Relief And Reform The Global Financial System To Alleviate Africa’s Debt Challenges.
Osinbajo Argued That The High Cost Of Borrowing Has Left Many African Nations Heavily Indebted To Developed Countries. However, He Clarified That Borrowing Itself Is Not Inherently Negative. “The Only Way By Which Countries Grow Is By Borrowing And Implementing Projects That Would Support Such Borrowing,” He Stated.
“There Must Be A Reform Of The Global Financial System. Many Of Us Have Heard About The Bridgetown Initiative And The Capital Adequacy Framework, Which Proposes To Strengthen Multilateral Development Banks So That They Can Lend More To Emerging Economies,” Osinbajo Said.
“There Are Technical Solutions Like Recycling Special Drawing Rights, Blended Financing, And Risk Mitigation Strategies That Can Help Reduce Borrowing Costs. Reducing The Debt Burden On African Nations Has Become So Important Because Many Are Severely Indebted And Spend Too Much Today On Debt Repayments, Leaving Very Little Room For Climate Investments,” He Added.