Sub-Saharan Africa’s plunge into a new debt crisis is alarming. An estimated 40 per cent of the region’s countries are at high risk of debt distress — double the proportion of five years ago. The situation is attributed to commercial lenders who are searching for higher-yielding assets, individual countries allowing spending to drift upwards across most items and opaque contingent liabilities of state-owned enterprises. Data by the Central Bank of Kenya , for example, had as at December 2017 put the Government's internal debt at Sh2.22 trillion, while the external debt stood at Sh2.35 trillion. The soaking in of fresh debt from international lenders pushed that above Sh4.8 trillion, making every Kenyan to owe the lenders KSh100,000.
Africa must rethink its unnecessary borrowing and cultivate internal financing. Prudent harnessing of the region’s abundant natural and intellectual resources is a good way to begin.