Economic growth: Ex-DMO boss advises on debt financing

Immediate past Director-General of the Debt Management Office (DMO), Dr Abraham Nwankwo, has adised African leaders to initiate “robust macro-economic, transformation plans to drive debtfinanced sustainable economic growth and prosperity.
Nwankwo gave the advice yesterday while speaking at the fourth London Stock Exchange LSEG Africa Advisory Group (LAAG) meeting in Nairobi, Kenya, on the topic “Sapping Africa’s Debt Financing Strategy: Removing Some Mental Cobwebs
” He said such a transformation plan was needed as a formal policy document, “narrating how debt financing will be applied to launch economy unto a trajectory of self-sustaining prosperity; with credible macroeconomic figures at the beginning, intermediate and concluding stages: GDP figures, inflation, interest rates, exchange rates, reserve position, etc.
” He, however, said the real job for governments, particularly officials in charge of planning, finance and central banking “is to demonstrate with detailed credible macroeconomic plan, how this prospect can be safely actualised.
” “The government may be keen on debt financing but lazy to articulate a credible implementation plan, with macroeconomic deliverables, around debt financing.
” He said, added to this intellectual laziness on the part of economic planners is also what he called the “Rigid, non-imaginative advice from the IMF in particular, which encourages policy timidity, instead of planned boldness.
” He said the IMF usually relies on past and present deficiencies to preach against the possibility of future progress instead of focusing on how to cage or degrade those deficiencies to create a new trajectory of efficiency and prosperity.
He said African countries would continue to rely on debt financing from the international capital market due to “acute fiscal constraints, huge infrastructure defi cit and huge reserves of exploitable opportunities in agriculture and agro-processing, manufacturing, solid minerals, tourism and other sectors.

 

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