Kenya’s Perfect Debt-Storm (PDS) Vs. Africa’s Debt-Trap Diplomacy (DTD)

The Kenyans are warning the African leaders in the ongoing street protests where the youths overpowered the Kenyan security services due to the government's attempt to pass a financial bill aimed at raising taxes to pay-off skyrocketed public debt.

Available data show Kenya owes Breton Woods ( IMF, World Bank, etc.) and other international financial institutions over a quantum of US$ 80 billion for both foreign and domestic debt. Kenya’s perfect debt-storm is potentially widening the debt-trap diplomacy, and subsequently, the entire continent's in debt entrapment. Recently, China has been the biggest bilateral creditor to Africa with over $5.7 billion injected into large infrastructure projects across the continent.

Nonetheless, the Western financial institutions and China's competition for lending opportunities in Africa, and their blame-games on debt-trap are considerable among other factors( such as Covid-19, global wars, etc. ), and country-level ( corruption, wastage of public resources through non-feasible projects) influencing the debt-choking Africa. This competition gradually puts Africa at a vulnerable end where a debt-trap is inevitable.

The framework of the global financial safety net is questionable from the African perspective, Africa is without a financial safety net. This problem motivated my doctoral thesis, where I am “ testing explicit deposit insurance schemes and other variables effects on African commercial banks stability and profitability levels.

According to African Development Bank (afdb) data , Africa’s external debt amounted to $824 billion in 2021, with countries committing 65% of their GDP to servicing these obligations. The severity of the debt problems is aggravating to the point that, for this year Africa would pay at least $74 billion in debt service payments representing a rise of $ 17 billion since 2010. While the Eurobond debt now accounts for a considerable 44% of Africa's total debt, a jump from 14-17% of previous accounting.

This article seeks to appeal to the Breton Woods (IMF, World Bank etc. ) and other credit partners for possible review and re-evaluation of their programs and conditionalities for Africa. It is imperative that the larger roadmap for the world that envisioned a robust financial and banking system for economic growth, development, and prosperity for all could be worked out equitably. Hence, the youths of Africa seek bailout programs and facility service conditions that reflect the future of hope. For instance, the G20 Common Framework could have an Africa-tailored version specifically for debt problems and conditionalities-programs adjusted, a mechanism that factors- in the future of African youths not only the repayment objective

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The African debt problem and developing countries were recently echoed by the U.N Secretary-General in his April Remark, he pinpointed that “around 40% of the world population lives in countries that spend more on loan interest payments than on health or education”, and a second quote “ the world cannot afford to continue throwing developing countries plans and future onto a raging bonfire of debt”.

In light of the above-analyzed issues, it is prudent that African governments on their part must work hard to expedite a balance between the raising revenues and high cost of living for the citizenry, and show serious commitment to fighting corruption and wastage of public resources.

!God bless Ghana, Africa, and our Creditors!.

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