About 40% of countries in Africa are at a debt-stressed level, while COVID-19 has forced a strong fiscal response globally as nations try to avoid lasting structural damage to their economies.

This is according to Governor Lesetja Kganyago of the South African Reserve Bank, who spoke at the fourth annual Distributed Interdisciplinary Sovereign Debt Research and Management Conference, or D-DebtCon. The conference is taking place virtually this year in nine countries, spanning five continents, from 7 to 18 September.

Governor Kganyago delivered the keynote address during D-DebtCon’s opening session, which was hosted by the University of Pretoria’s Centre for Human Rights in the Law Faculty.

He also cautioned that the debt crisis faced by the continent in the 1980s and 1990s had shown that poor management of debt would lead to an inability to pump much-needed financial resources into key development areas.

“While debt has a very important role to play in economic development, one should also reflect on the challenges and pitfalls presented by debt to developing countries in Sub-Saharan Africa,” he said. “Experience has shown that unsustainable debt burdens and rising debt service costs crowd out spending in key development areas such as education, health and infrastructure.”

In her welcome remarks, Law Faculty Dean Professor Elsabe Schoeman said the conference is taking place at an opportune time and that the sharing of experiences from across the world would be beneficial. “The COVID-19 pandemic has exposed new sovereign debt challenges and exacerbated old ones. This should be a very interesting conference.”

Governor Kganyago’s speech highlighted the sovereign debt situation from an African Central Bank perspective, which linked broadly to the topic of the day: ‘Africa’s Debt Conundrum’. This was also the theme of the panel discussion that followed his address.

In the discussion, three papers were presented on various issues, including the impact of interest holidays and how countries can perfect sovereign debt contracts, how international law and economics affect sovereign debt, and outlining a plan for countries to survive market turmoil. Among the speakers were Deputy Governor of the Bank of Ghana Elsie Awadzi; Rodrigo Olivares-Caminal, a Professor in Banking and Finance Law at the Centre for Commercial Law Studies at Queen Mary University in London; and Stratos Nikolaos Pahis, Acting Assistant Professor of Lawyering at NYU Law.

The Interdisciplinary Sovereign Debt Research and Management Conference, or DebtCon, was launched in January 2016 at the Institute of International Economic Law at Georgetown University in the US. Its mission is to engage scholars and practitioners across geographic, disciplinary and institutional boundaries to help solve pressing sovereign debt problems. DebtCon brings cutting-edge research to bear on policy and market practice, and helps make research more impactful with exposure to real-world policy and market experience.

Each day of this year’s conference will feature academic and policy panels in South Africa, Italy, Argentina, Switzerland, Singapore, the US, Barbados, the UK and China. Participants will discuss topics such as sovereign debt sustainability and debt vulnerabilities, restructuring architecture, debt transparency, fiscal federalism, resilience against pandemic and climate shocks, financial history, and the particular debt challenges facing countries in Africa and Latin America, as well as China and the European Union.

To watch the full session click here 

For more information on the conference click here