Africa borrows at eight times higher cost than rest of world, Mahama says

Former President John Dramani Mahama has highlighted a significant disparity in global finance, stating that Africa borrows at rates eight times more expensive than the rest of the world. Despite the continent's wealth in essential resources such as gold, cocoa, oil, lithium, and cobalt, African nations are often treated as high-risk borrowers, forcing them to pay high premiums to access development capital.

Mahama identified several drivers of the continent's debt challenges, including illicit financial flows, high debt servicing costs, and risk premiums. He estimated that approximately $90 billion leaves Africa annually through illicit financial flows alone. When combined with interest payments and additional costs associated with African risk, he estimated that more than $240 billion exits the continent every year, a figure that far exceeds the amount returned through development assistance.

While acknowledging that African governments must address internal issues such as corruption, waste, and poor economic management, Mahama argued that the current financial system creates a cycle where countries struggle to repay debt and are forced into repetitive cycles of restructuring and stabilization.