Debt in Africa rises to over $324.70 billion

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Africa’s external debt has risen from $300.58 billion to $324.70 billion in 2010, according to a report by the Economic Commission for Africa (ECA).

Perhaps the most worrying statistic from the report suggested that the overall debt to gross domestic product (GDP) ratio is 24.91%.

The report also suggested that sub-Saharan Africa accounted for two thirds of the debt, a particularly galling figure for that area.

The report has compared debt figures from 2009 to 2010, with North Africa faring the best in the region as their debt grew from just $44.43 billion to $46.24 billion.

The global financial crisis can obviously be put forward as one of the major reasons for the debt rise. In 2006, prior to the global collapse, Africa’s total debt stood at just $252.93 billion.

That indicates a rise of over $70 billion in just four years.

There was positive news though; with the report noting that over the course of the last decade debt sustainability in Africa has generally improved.

The main reason put forward for the improvement in debt sustainability was the many debt-relief initiatives that have been started over the last decade.

The report stated that “of the 40 countries globally eligible for assistance under the Heavily Indebted Poor Countries (HIPC) initiative, 33 of them are in Africa.”

This indicates that the help those countries have received has helped them to learn to cope with debt over the years.

However, the new reports of a recent rise on last year mean there is still much work to be done.

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