The Middle East's investments in Africa hold the key to unlocking the continent's economic resurgence, as they address critical economic and infrastructure needs and offer new avenues for collaboration, particularly in sub-Saharan Africa, where Chinese investments have decreased. The GCC's interest in Africa's growth is fueled by robust GDP figures and an abundance of available capital, creating opportunities for partnerships in sectors such as infrastructure, telecoms, and food security. However, challenges such as the infrastructure deficit and political uncertainties need to be addressed to sustain this partnership.
Malawi's central bank has stated that the country is making progress in restructuring its $1.2 billion external debt, with negotiations with creditors showing positive results and the government remaining optimistic about reaching acceptable terms. The lack of foreign currency has constrained debt servicing and affected the government's operations, leading to severe shortages of vital imports and long queues at fuel stations.
The global economy may face slow growth due to record levels of government debt, geopolitical tensions, and weak productivity gains, which could hinder development in some countries even before it begins.
President Biden aims to offer alternative funding options to fast-growing economies in Africa, Latin America, and Asia at the G20 meeting in India, in an attempt to counter China's Belt and Road project, which has left many countries in debt.
The 2023 New Delhi Summit of the G20 has been a success, with India demonstrating its ability to organize a global event; however, the summit's ability to produce substantial solutions to world problems, particularly the geopolitical crisis, is questionable. The summit managed to come up with a joint leaders' declaration, including language on Ukraine that accommodates all shades of opinion. The summit also focused on issues such as debt restructuring, climate change, renewable energy, artificial intelligence, and terrorism financing. However, the effectiveness of these actions will depend on whether countries actually implement them.
The G20 leaders have made a commitment to accelerate reforms of multilateral development banks (MDBs) in order to address global challenges and maximize developmental impact, with a focus on the needs of low- and middle-income countries. India, as the outgoing G20 President, has emphasized the need for MDBs to be more sensitive to the changing developmental needs of the 21st century, particularly in relation to climate change. A panel of experts has been set up to craft these reforms, which include tripling sustainable lending levels by 2030 and creating new funding mechanisms. The G20 has also called for ambitious implementation of a roadmap on the capital adequacy framework of MDBs, which could unlock $200 billion worth of extra funding potential.
The top 10 African countries with the highest debt-to-GDP ratio are Eritrea, Cape Verde, Mozambique, Republic of the Congo, Sierra Leone, Ghana, Egypt, Gambia, Senegal, and Morocco.
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