A PRESENTATION referring to ‘the noise around the Chinese debt to African countries’ made at the annual meetings of African Association of Central Banks indicated the noise is ‘unfounded’, said John Rwangombwa, chairperson of Association of African Central Banks and governor of Rwandan central bank.
The percentage that the Chinese debt accounts for to the total African debt can’t be taken as a problem to Africa, said Rwangombwa at a press conference in Kigali, capital city of Rwanda, shortly after the meetings closed.
‘It is good to borrow, and borrow externally is ok, but African countries have to ensure investing in right projects that make the economy to generate foreign exchange, which in turn help them pay back the debt,’ he said.
It is advisable to borrow from the internal to reduce foreign exchange risk, but Africa faces the financing gap, said the governor, adding that African countries have to improve debt management capacity, borrowing for the right purpose and manage to build their capital markets.
The fact that the debt in Africa has ratcheted up is not unique to the continent, but a global phenomenon which requires global management, Rwandan economist and former president of the African Development Bank Donald Kaberuka said at Wednesday’s plenary session of the symposium on the topic: ‘African sovereign debt management strategies: lessons from regional and international experiences.’
Rwanda hosted the meetings from July 28 to August 1, under the theme ‘Rising African Sovereign Debt: Implications for Monetary Policy and Financial Stability’, which brought together more than 400 participants including African central bank governors and their senior staff, domestic economic policymakers, development partners, financial sector players, academia, think tanks and representatives of African regional economic communities.