High-cost loans, Donald Trump turmoil hurting Africa, says G20 panel chief

CRITICALLY needed economic growth in Africa is being held back by high borrowing costs imposed by international lenders, with unpredictable US policy changes adding to the strain, the head of the G20 panel on the continent said.

- AFP

Seasoned politician and anti-apartheid activist Trevor Manuel chairs the panel of experts working on proposals to address issues affecting Africa, including high debt, to be presented at a summit of the Group of 20 leading economies in November.

African nations are not necessarily more indebted than major economies but they face higher debt servicing costs, Manuel told AFP in an interview.

The "unbelievably expensive and prohibitive" cost of capital for African nations has hobbled their development, said Manuel, who served as finance minister in post-apartheid South Africa for more than a decade.

“We know that the risk premiums in general on Africa are much higher than they need to be, and that impacts them on the debt service costs," he added.

More than half of Africa's 1.3 billion people live in countries with debt interest payments higher than social spending on health, education and infrastructure, according to the South African government.

South Africa is the only African nation in the G20 and has made debt sustainability for developing countries one of the priorities of its presidency of the group of 19 countries, the African Union and European Union.