Africa is a long way from facing a debt crisis even as commercial lending to the continent soars and Mozambique became the first regional country to miss a payment on a dollar loan this year, according to a senior official at the African Development Bank.

Debt levels across the continent’s 54 countries average 17 per cent to 18pc of GDP, which is low, Abebe Shimeles, acting director in the AfDB’s development research department, said on Thursday.

“In terms of the continent we are not even close, forget about crisis, we are not even close to a debt burden, especially the external debt,” said Shimeles. “It’s not systemic now. It’s not that all African countries are exposed to a debt crisis. The bad news is sometimes heard faster than the good news.”

Africa raised $26 billion in Eurobonds from 2006 to 2014 and a further $12bn last year, AfDB President Akinwumi Adesina said on May 24 when he officially opened the meetings, warning a debt crisis must be avoided. While foreign-currency debt has soared, currencies on the continent have weakened, making repayments more costly as economic growth slows.

“Some countries have also experienced a spike in their debt levels that may be worrying in particular cases, unless they take measures to contain it,” Shimeles said. “The AfDB and other multilaterals can learn from previous mistakes and really step in with a solution to manage the debt, restructure it and also undertake some necessary reforms before we reach a level of crisis.”

By arrangement with Bloomberg/Washington Post Service

Published in Dawn, May 29th, 2016