The immediate past Director General of the Debt Management
Office (DMO) in Nigeria, Dr Abraham Nwankwo, has admonished African leaders to
initiate robust macroeconomic, transformation plans to drive debt-financed
sustainable economic growth and prosperity, reports ITRealms.
Speaking on the topic “Sapping Africa’s Debt Financing
Strategy: Removing Some Mental Cobwebs”, at the Fourth London Stock Exchange
LSEG Africa Advisory Group (LAAG) Meeting in Nairobi, Kenya, Nwankwo said such
a transformation plan is needed as a formal policy document, “narrating how debt
financing will be applied to launch economy unto a trajectory of
self-sustaining prosperity; with credible macroeconomic figures at the
beginning, intermediate and concluding stages: GDP figures, inflation, interest
rates, exchange rates, reserve position, etc.”
Nwankwo, who holds a PhD in economics, said Debt Financing,
particularly external debt financing from the international capital market,
appears to be the most predictable source for financing and refinancing
Africa’s economic and social transformation over the next decade.
However, he stated that the real job for governments,
particularly officials in charge of planning, finance and central banking is
“to demonstrate with detailed credible macroeconomic plan, how this prospect
can be safely actualized.”
He stressed that many African countries have failed to
initiate credible transformation plan thereby squandering the opportunity to
grow their economies through debt financing. “The government may be keen on
debt financing but lazy to articulate a credible implementation plan, with
macroeconomic deliverables, around debt financing.”
Added to this intellectual laziness on the part of economic
planners is also what he called the “Rigid, non-imaginative advice from the IMF
in particular, which encourages policy timidity, instead of planned boldness.”
He said the IMF usually relies on past and present
deficiencies to preach against the possibility of future progress instead of
focusing on how to cage or degrade those deficiencies to create a new trajectory
of efficiency and prosperity.
He said: “Much of IMF advice on Africa’s debt financing
misleads countries to commit what I first referred to in a 2017 publication as
the “sin-of-avoiding-a-sin’(SAS)”
He further stressed that African countries would continue to
rely on debt financing from the international capital market due to acute
fiscal constraints, huge infrastructure deficit and huge reserves of
exploitable opportunities in agriculture and agro-processing, manufacturing,
solid minerals, tourism and other sectors.
Uboshe Uboshe/GEE
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