
African leaders are calling for a new way to measure economic strength by including the continent’s vast natural resources in GDP calculations.
The African Development Bank (AfDB) argues that forests, wildlife, and carbon-absorbing ecosystems should be recognized as economic assets to improve debt metrics.
This push is gaining momentum ahead of major international summits, including the G20 and African Union meetings scheduled for this year.
AfDB President Akinwumi Adesina insists that African economies are undervalued and need a revised framework that acknowledges their true wealth.
Africa’s total GDP in 2018 stood at $2.5 trillion, but its natural capital was estimated at $6.2 trillion, according to AfDB reports.
By recalculating GDP, leaders hope to lower debt-to-GDP ratios, making borrowing cheaper for African nations facing high financing costs.
However, critics argue that adjusting numbers on paper does not automatically translate into a stronger ability to repay debt obligations.
Some financial experts believe that while GDP recalculations may improve perception, investors still need guarantees of stable returns.
Kenya and Nigeria, for instance, issued dollar bonds last year with interest rates of 10%, much higher than developed economies’ rates.
Africa’s external debt has surged to $500 billion from $150 billion over the past 15 years, making financing a growing challenge.
South Africa’s G20 presidency will likely feature discussions on this issue, with key financial leaders meeting in February.