Professor of Finance at Andrews University in the United States of America, Prof. Williams Kwasi Peprah says borrowing should not be a problem for African countries but what the country borrows for is.
Despite the huge debt overhang which has become an albatross on the neck of the continent, many countries cannot pinpoint the impact of these huge debts.
The finance professor therefore says African governments should ask themselves this question as the continent’s debt pressure grows. He offered this advice as President John Dramani Mahama calls for debt relief and reforms to the global financial architecture ahead of the United Kingdom’s 2027 G20 Summit.
Reacting to the push, Prof. Peprah, who was speaking in an interview monitored by The High Street Journal, emphasized that borrowing itself is not the problem, however the purpose of borrowing is.
He urged African leaders to borrow for viable, productive projects rather than consumption, and he laid out three strategies.
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Renegotiate the loans already taken
His first piece of advice concerns what is already on the books. African countries have borrowed from international markets and from other countries, and Prof. Peprah believes the time has come to go back to the table.
“This is the time to renegotiate some of the loans,” he said. Governments can try to stretch out the repayment period or ask for a reduction in the interest expense.
The experts say longer repayment periods and lighter interest payments leave a government with more fiscal room to operate each year.
Find and plug the waste
His second advice is for governments to look at their own spending. African governments, he said, must ask themselves where they are wasting money.
For instance, in the case of Ghana, every cedi that goes into avoidable waste is a cedi that cannot go toward interest or debt payments. “Instead of using it to pay the interest or debts that we have borrowed, can we reduce the waste in African countries for our administration,” he asked, so that governments can find the money to pay debts when they fall due.
This part needs no negotiation with creditors. It requires only discipline at home. Trimming waste in administration, he suggested, would free funds to meet obligations on time without piling up fresh borrowing.
Borrow for projects that pay for themselves
Prof. Peprah’s third piece of advice may be the most important for the future. He asked whether African countries can invest borrowed funds in projects that generate enough revenue to repay themselves.
He stressed that “You must borrow for projects that can repay itself,” and not for consumption.
A loan used to build something that earns income, such as a project that brings in revenue year after year, is a different animal from a loan used to cover running costs. The first can pay for itself over time. The second leaves the bill with nothing to show for it.
Why the timing matters
The professor’s comments come as Africa’s debt story moves onto a global stage. President Mahama has been calling for debt relief and for reforms to the global financial architecture ahead of the 2027 G20 Summit in the United Kingdom.
Prof. Peprah’s advice fits alongside that call. Global reform and relief may help, but his three strategies are things governments can act on themselves. Renegotiate what is owed, cut waste, and borrow only for what can pay its own way.
For him, borrowing is a tool that should be used to build something that earns. This can help the country grow.
As leaders prepare to bring the continent’s debt concerns to the world’s biggest economies in 2027, Prof. Peprah wants African governments to arrive with their own house in order. Ask whether old loans can be eased. Ask where money is leaking. Ask whether new loans will earn their keep.
In his words, the question is not whether Africa should borrow, but what it borrows for.
