President of the African Development Bank (AfDB), Akinwumi Adeshina, has disclosed that Africa’s collective debt is now put at 70 percent of Africa’s gross domestic product (GDP).

Mr. Adeshina, hence, stated that with this latest data, there is a need for governments in Africa to set up an African Financial Stabilisation Mechanism meant to enhance debt restructuring in the continent.

The bank, via a press release on Tuesday, disclosed that Mr. Adeshina made the call at the launch of the 2021 edition of the bank’s annual African Economic Outlook where he stressed the need for a quick and comprehensive plan to achieve such objective.

Data made available by the bank at the event, estimated a 2.1 percent contraction of Africa’s GDP in 2020, representing the continent’s first recession in half a century, but however projects Africa’s GDP to experience a 3.4 percent growth in 2021.

Mr. Adeshina stated: “It is high time that we set up a homegrown financial stability mechanism where we work together to mutualize our funds and ensure we avoid the spillover effects that come from global pandemics or any external shocks.”

The AfDB chief further stated that: “We must start by making sure that we carry out the macroeconomic policy reforms and the fiscal policy reforms that we need to get done.”

Africa “is not looking for a free pass. We are just looking for an equitable way in which Africa’s fiscal space gets dealt with,” Mr. Adeshina added.

Going by data provided by the Africa Economic Outlook, the share of commercial creditors in Africa’s external debt stock rose to 40 percent by the end of 2019 from 17 percent in 2000, which is more than double in the last two decades.