Addis ababa: Ethiopia has launched the Second African Forum on Sovereign Finance, bringing together top policymakers and financial leaders to address rising debt vulnerabilities and tightening fiscal space across the continent. The three-day gathering, held in Addis Ababa, has convened representatives from finance ministries, debt management offices, multilateral institutions, credit rating agencies, and institutional investors under the theme 'Enhancing Fiscal Space and Debt Sustainability.'
According to Ethiopian News Agency, the forum is jointly organized by the United Nations Economic Commission for Africa (UNECA) and FSD Africa. Opening the session, State Minister Semereta Sewasew cautioned that successive global shocks have deepened fiscal pressures across African economies. She noted that external financial buffers have steadily eroded, with foreign exchange reserves relative to external debt declining sharply over the past decade.
State Minister Sewasew emphasized that debt management is now central to macroeconomic stability, development strategy, and policy credibility. She highlighted that global shocks, from the pandemic to geopolitical conflicts, have reshaped the sovereign financing environment, increasing borrowing costs and intensifying exchange rate pressures. Ethiopia's reform trajectory, following the approval of its International Monetary Fund program in July 2024, was also a focal point, with noted progress in exchange rate liberalization, domestic revenue mobilization, and fiscal transparency.
Semereta pointed out that inflation is moderating, exports are expanding, reserves are rebuilding, and fiscal space is improving. Ethiopia secured 3.5 billion US dollars in debt relief under the G20 Common Framework. She called for coordinated action to reduce borrowing costs, strengthen domestic capital markets, and scale up concessional financing.
Executive Secretary of the UNECA, Claver Gatete, described the forum as a platform for urgent and sustained reform. He highlighted that growth is slowing, financial conditions are tightening, and uncertainty is persistent. These global shifts are impacting African economies, shaping fiscal space, constraining policy choices, and raising the cost of capital.
Despite challenges, Gatete noted signs of resilience, with growth in the IMF sub-Saharan Africa region recovering to 3.5 percent this year and projected to increase to 4 percent next year. He warned that Africa's momentum is threatened by its debt burden.
Mark Napier, Chief Executive Officer of FSD Africa, spoke about the links between debt, climate finance, and market reforms. He expressed hope that the forum could advance climate finance, referencing COP32 and Ethiopia's role. He emphasized the interconnectedness of sovereign debt, climate, and domestic capital market reform.
Delegates are expected to conclude the forum with concrete strategies aimed at unlocking private investment and expanding fiscal space to support sustainable development across Africa.