A new report by Action Aid International has recommended that African governments coordinate for a resolution to debt crises.
This, according to economic experts, should be based on radical renegotiations with the World Bank and the International Monetary Fund.
The report titled ‘Fifty Years of Failure: the IMF, Debt, and Austerity in Africa’ based on new research from Uganda and nine other African countries, shows that 8 out of 10 countries are in debt distress and have been advised to cut or freeze public sector wage bills.
Gilbert Musinguzi, the Quality Assurance Manager at the Uganda Debt Network, underscores the need for better reforms to address poor policies imposed on African countries by the IMF and World Bank.
“When government is asking for a loan, it gives a clear feasibility study and indicates how prepared they are. They also indicate how they are able to contribute the matching fund but when time comes, you find that government does not have the matching fund. But now, you are reaching almost the end of the debt period before implementing the project and end up defaulting,” Musinguzi said.
By the end of June 2023, Uganda owed lenders a whopping Shs88.9 trillion, which is almost twice the Shs52.7 trillion budget for the financial year 2023/2024