NO PROPER RECONCILIATION OF PUBLIC ASSETS

NAIROBI - African countries that include Eswatini are accused of failure to properly reconcile their public assets.

These include assets of public enterprises. The failure to reconcile may lead to accumulation of unnecessary public debt. Dr Enock Nyorekwa, a senior and celebrated economist from Uganda, made the observation. He was speaking during the ongoing media workshop organised by AFRODAD in Nairobi, Kenya. African Forum and Network on Debt and Development (AFRODAD), which is a Pan-African organisation committed to assisting the long-term development of the continent through contributing to finding solutions to Africa’s challenges in debt, resources management and financial development, has organised the workshop. AFRODAD and partners are hosting the AFRODAD Media Initiative (AFROMEDI) to build capacity of journalists on debt and development.

Workshop

Business journalists from 20 African countries are participating in the workshop which started on Monday. It will run until today. In his presentation, Dr Nyorekwa also noted that domestic borrowing was expensive for countries, as they ended up paying interests of not less than 10 per cent in most cases. “African countries hardly have a budget surplus. With COVID-19 came a policy trilemma of increased spending, lower taxes and rise in debt,” he observed. The other challenge of government’s increased domestic borrowing, according to Dr Nyorekwa, was that countries ended up competing with the private sector for loans, yet the latter were major creators of jobs. Meanwhile, the general feeling among the panelists was that debt was unavoidable as it was an enabler for development. It was stressed that it should be managed properly as too much debt could lead to downgrade. Downgraded countries usually pay high interest for loans.

Debt

It was stressed that debt was not a bad thing, especially if used properly as there were countries with high debts but developed. A classic example is Japan, with over 200 per cent of debt to gross domestic product (GDP). Meanwhile, one of the panelists identified as Elsa Sandrine Sawadogo zoomed in on the true cost of public debt. She said governments paying back loans struggled to pump in the required minimum allocations of between 10 and 15 per cent in key sectors like agriculture and health. The workshop, on the other hand, was expected to reach climax yesterday with practicals on top of presentations from celebrated journalists from across the Southern African region. They include seasoned economist writer Thuletho Zwane from Business Day in South Africa as well as Yvonne Mooka from Botswana, an award-winning journalist who is also attached to British Broadcasting Corporation (BBC) Africa.

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