Financial training and debt management

Sub-Saharan Africa has seen a concerning trend in the past decade, with the average debt ratio almost doubling from 30 per cent of GDP in 2013 to nearly 60 per cent by the end of 2022. This surge in debt has not only raised alarms but has also resulted in higher costs for repayment, impacting the economies of the region. CNBC Africa recently sat down with Jawara Mendy from Gambia's Debt Office to discuss the African Development Bank's (AfDB) financial management training initiative and Gambia's debt to GDP targets for 2024. Mendy shed light on the challenges faced by the region and the strategies being employed to manage the growing debt burden. One key focus of the financial reform is to assist countries in establishing secondary markets to facilitate trading and to help nations without capital markets to develop them. The introduction of these platforms could potentially ease some of the financial strain faced by countries, allowing for more efficient debt management. In terms of financing instruments and debt offerings in Gambia, Mendy expressed concerns about the rising rates associated with local bonds and bills, attributing the increase to inflation. He emphasized the importance of exploring ways to make borrowing more affordable, as high borrowing costs can significantly impact a country's revenue allocation, diverting funds from crucial social programs and development projects. As Gambia aims to reduce its debt to GDP ratio, which currently stands at around 80 per cent, Mendy affirmed that efforts are underway to bring this ratio down in the medium to long term. By addressing the challenges of debt management and seeking innovative solutions to improve financial stability, Gambia and other nations in the region are striving to create a more sustainable economic future.