it helps to improve economic growth. while the primary responsibility for avoiding the build - up of unsustainable debt lies with the borrower, creditors also have a role to play in encouraging greater transparency. irresponsible borrowing ultimately contributes to unsustainable debt burdens. in closing, i wish to reiterate that public debt has an important role to play in financing development, particularly in augmenting government budgets. however, it should be clear that debt is not a replacement for domestic revenue mobilisation. meanwhile, debt levels have to remain sustainable so as to not undermine market confidence. to ensure that debt plays a meaningful role, it must be utilised for revenue generating activities that increase the productive capacity of the economy. countries in the region could benefit from the slower - than - expected monetary policy normalisation in major economies to build additional buffers, preferably aimed at increasing fiscal space and setting development priorities on course. the international community is eager to help. early in may, the g20 called a high - level conference on 4 mustapha s. and prizzon a., “ africa ’ s rising debt – how to avoid a new crisis ”, october 2018 5 in madagascar, for instance, large subsidies and transfers to troubled state - owned enterprises ( soes ) such as the electricity utility jirama and air madagascar to cover debt obligations have increased government liabilities. the imf, in its 2018 article iv assessment, highlighted that unexpected losses at soes or delayed reforms in public spending could crowd out pro - growth priority spending in madagascar. in ghana, the government also faces significant contingent liabilities from the energy soes, which continue to face challenges. page 3 of 4 sustainable debt for sustainable growth ( the paris forum ). the key objective is to assist countries with debt management capacity and improve debt transparency. the key conclusion of the paris forum was not to say that countries should borrow less but that they should be assisted to “ borrow smarter ”, by ensuring that borrowers are equipped with expertise to understand their real needs, to secure good terms and to effectively manage their debt, while holding creditors to higher standards on transparency and sustainability. i also want to take this opportunity to congratulate the aerc for continuing to have a policy - oriented research programme that remains relevant for policy makers. today ’ s programme is filled with the right mix of policy practitioners and academics to give us for food for thought. thank you page 4 of 4

the 2013 levels. average public debt across the region rose close to 56 % of gdp at the end of 2018, with wide disparities in debt dynamics across countries. for example, in 2018, public debt - to - gdp stood at 72 % in zambia and 100 % in mozambique. debt servicing costs have also risen sharply, with the median interest payment burden doubling to about 10 % of revenue between 2011 and 2018. while debt levels is not as high as they were in 1990s, there is growing concern that africa is at risk of landing in debt traps once again. in their 2010 paper, titled “ growth in a time of debt ”, reinhart and rogoff argue that high debt could create uncertainty, deter investment and innovation, and the literature shows that it could have a negative impact on growth. i am inclined to agree with them. in addition, unsustainable debt burdens and rising debt service costs crowd out spending in key development areas such as education, health and infrastructure. these were exactly the lessons learned during the african debt crisis of the 1980s and 1990s, and which justified debt relief. consequently, badly managed debt could now reverse some of the developmental progress made over the past twenty years. the financial landscape has also been changing, not only because of easier global financial conditions but also the increasing share of borrowing from non - traditional lenders and the types of debt instruments in the market. the share of borrowing from non - traditional lenders has risen to about 15 % of global gdp. financing instruments such as collateralised sovereign loans are also gaining prominence. the terms of these loans are often complex and typically only revealed after countries experience debt distress as was seen in chad and the republic of congo recently 2. this increased reliance on non - traditional creditors has raised borrowers ’ exposure to market risk, while at the same time posing additional challenges to the sustainability of external debt in the region. for instance, in the case where countries find themselves in debt distress, it may be harder to come to a rescheduling agreement with a large number of private creditors than when you had, in the past, a relatively small number of public creditors ( paris club ) or commercial bank lenders ( london club ). in chad, for example, collateralisation also made debt restructuring more complex since it reduced the room for manoeuvre for sovereign borrowers 3. we can also think of the problems recently faced in argentina, where bondholders refused to accept restructuring terms. data from the world