The African Development Bank (AfDB) has outlined strategies for Nigeria and other African nations to address rising debt burdens and foreign exchange challenges.
Kevin Urama, AfDB’s Vice-President for Economic Governance and Knowledge Management, emphasised the importance of strategic borrowing and political stability in an interview with the News Agency of Nigeria (NAN). He noted that while public debt is not inherently bad, the structure and utilisation of borrowed funds are crucial for sustainable growth.
“Debt for growth is effective when loans are long-term, low-interest, and tied to investment plans capable of generating returns,” Urama explained. He criticised the trend of short-term, high-cost commercial loans in African countries, which often lead to unfavourable refinancing cycles.
For Nigeria, he urged that borrowed funds be channelled into infrastructure projects that stimulate both immediate and long-term economic growth.
On foreign exchange and trade, Urama highlighted Africa’s dependence on imports, particularly food, as a major concern. Despite having 65% of the world’s remaining arable land, many African countries import staples like wheat.
“Africa should not be importing wheat when we have the capacity to feed ourselves and the world,” Urama stated, citing Ethiopia’s transformation into a wheat exporter within four years as a model for other nations. He pointed to initiatives like the AfDB’s AgriPreneur and Special Agro-Industrial Processing Zones (SAPZ) as tools to unlock the continent’s agricultural potential.
Urama also stressed the role of political stability and sound macroeconomic policies in reducing capital costs and attracting foreign investment. He referenced Botswana’s success as evidence that stable governance can drive economic growth.
He concluded that Africa’s economic challenges can be resolved through long-term strategies focused on local production, value addition, and good governance, which would reduce dependency on external financing and stabilise currencies.
Credit: NAN (Text Excluding Headline)
