Africa faces escalating debt challenges exacerbated by external shocks, currency volatility, and unfavourable borrowing conditions. In 2024, debt servicing costs soared to $90 billion, straining public finances and hindering progress toward the SDGs. A key solution lies in expanding local currency (LC) lending by multilateral development banks (MDBs). LC lending reduces exchange rate risks, enhances debt sustainability, and fosters economic resilience. Strategic steps include scaling up direct LC loans, improving debt management systems, and incentivizing LC borrowing through policy reforms. Upcoming global forums provide opportunities to advocate for Africa-led solutions.
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