SECOND AFRICAN FORUM ON SOVEREIGN FINANCE

Topic:

Enhancing Fiscal Space and Debt Sustainability

Statement

By

Mr. Claver Gatete

United Nations Under-Secretary-General and

Executive Secretary of ECA

Addis Ababa, Ethiopia

06 May 2026

H.E. Ahmed Shide, Minister of Finance of the Federal Democratic Republic of Ethiopia,

H.E. Francisca Tatchouop Belobe, Commissioner for Economic Development, Finance, Trade, Industry and Mining of the African Union Commission,

Mr. Mark Napier, Chief Executive Officer of FSD Africa,

Esteemed Debt Management Officers from across the continent,

Colleagues, Experts and Partners from multilateral institutions, credit rating agencies, philanthropic foundations and civil society,

Distinguished Delegates,

Ladies and Gentlemen:

It is with great privilege that I welcome you to the "Second African Forum on Sovereign Finance" on the topic: Enhancing Fiscal Space and Debt Sustainability.

I extend my sincere appreciation to the Government of Ethiopia for hosting us, and to FSD Africa for this strong and growing partnership.

When ECA and FSD Africa convened the first Forum in Nairobi in June 2025, we made a commitment to hold a sustained, practical engagement, not a one-off dialogue.

Today, we are honouring that commitment.

Excellencies,

Distinguished Colleagues,

We convene at a moment of fast-evolving global realities.

As we speak, growth is slowing, financial conditions are tightening and uncertainty is no longer episodic but persistent.

Geopolitical tensions, from Eastern Europe to the Middle East, as well as the security situation in Africa, continue to disrupt trade flows, elevate commodity prices and amplify volatility across financial markets.

These global shifts are already transmitting directly into African economies, shaping fiscal space, constraining policy choices and raising the cost of capital at a time when investment is most needed.

What does this mean for Africa?

It means that external shocks are compounding existing vulnerabilities, that access to affordable finance is narrowing, and that the cost of development itself is rising.

Surely, it cannot be right that a continent home to twelve of the world's fastest-growing economies continues to face the highest cost of capital globally.

Despite these headwinds, Africa's macroeconomic fundamentals have demonstrated resilience.

Growth reached 3.9% in 2025, up from 3.5% in 2024, and is projected to increase further to 4.0% in 2026 and 4.1% in 2027, which is above the global average.

So, this is Africa's moment of momentum.

But that momentum is threatened by our debt burden.

16 African countries are at high risk of debt distress, with 7 already in distress.

External debt has reached approximately US$1.2 trillion, representing a significant share of GDP - and in many countries, more than a quarter of public revenues are now absorbed by debt service.

In practical terms, this means classrooms not built, clinics not staffed or equipped, and jobs not created.

It means that development is not just delayed; it is diminished.

Sustained growth becomes challenging when the expenses associated with financing it persistently increase.

Excellencies,

Recent global developments have further intensified these pressures.

Disruptions linked to geopolitical tensions have already contributed to a 32% increase in crude oil prices and a 33.4% rise in fertilizer prices, while currencies in nearly 30 African countries have depreciated.

A prolonged shock could reduce Africa's growth by an additional 0.2 percentage points.

This presents an immediate fiscal challenge for many countries.

At the core of Africa's debt challenge, Excellencies, lies a structural issue in how the continent is assessed and priced in global financial markets.

Today, only two African countries - Mauritius and Morocco - are rated investment grade, while as many as 19 countries remain unrated altogether.

Even more concerning, available evidence suggests that at least 16 African countries are paying more in debt service than their fundamentals justify - amounting to an estimated cumulative loss of over US$74 billion.

This brings us to a fundamental question: Are we accurately pricing risk; or systematically mispricing Africa?

Because when rating methodologies rely on outdated indicators and fail to capture reform momentum, resilience and long-term growth prospects, the result is a persistent and costly mispricing of African economies.

The Economic Commission for Africa has consistently brought this issue to global policy platforms- from Seville to the G20 - and continues to advocate for reforms that strengthen Africa's collective voice in global financial debates, support evidence-based narrative shaping, and address persistent misperceptions of risk in line with the continent's development realities.

And this is why ECA continues to advocate for reforms - including support for the Africa Credit Rating Agency - to promote more balanced, transparent and forward-looking assessments.

So, this Forum, Ladies and Gentlemen, is therefore both timely and decisive.

Over the coming days, discussions will focus on practical solutions: integrating sustainability into debt strategies, strengthening institutional capacity, improving investor engagement and deploying innovative financing instruments.

And Côte d'Ivoire has already effectively applied this approach by refinancing expensive debt to expand education infrastructure for over 30,000 students.

The question is how do we scale such successes across the continent?

Allow me, Excellencies, to highlight four priorities.

First, we must embed sustainability at the core of debt management.

Medium-Term Debt Strategies must align with climate and development objectives, while liability operations must actively reduce the cost of debt through sustainability-linked instruments.

Countries like Morocco, Egypt and Nigeria are already doing this.

This Forum will help every country define its own pathway.

Second, we must strengthen institutional and data foundations. Credible instruments require credible systems.

However, weak data, incomplete liability registers and limited coordination are key constraints, and these are gaps ECA is addressing through its reports, technical assistance and this Forum's peer learning platform.

Third, engage investors and partners as strategic allies.

Blended finance, guarantees and risk-sharing mechanisms must be scaled to unlock capital and reduce financing costs across the continent.

The example of Côte d'Ivoire should be replicated across Africa.

And fourth, we must leave this Forum with clear country-level priorities and actionable roadmaps guiding implementation through 2026 and beyond.

Ladies and Gentlemen,

Ultimately, this conversation goes beyond debt.

Every decision you make carries real consequences for millions of Africans.

Your work helps determine whether governments can educate children, protect citizens from climate shocks and build the infrastructure needed for productive economies.

With Ethiopia preparing to host COP32 on behalf of Africa, the stakes could not be higher.

Climate ambition will require financing at scale, and financing at scale will require systems that are credible, transparent and fair.

I encourage you to participate actively, share your experiences openly and engage constructively in the discussions over the coming days.

And the Economic Commission for Africa remains committed to supporting member States through evidence-based policy advice, capacity building and partnerships that deliver measurable impact.

I wish you all a successful Forum.

I thank you.