Saudi Arabia pushes for Africa debt relief as private investments set to reach $25B

RIYADH — Saudi Arabia's finance minister on Monday urged countries around the world to help find solutions to Africa's trillion-dollar debt problem, saying the kingdom was making progress on a $5 billion pledge toward development finance for the continent.

"As the head of the International Monetary and Financial Committee [of the International Monetary Fund] and the World Bank Group and the G20 group, we aim to develop solutions for handling debts of the African countries, especially the countries that have less income," Mohammed al-Jadaan told the Future Investment Initiative conference in Riyadh.

The IMFC is a body that advises and reports to the governors of the IMF. Jadaan is the current head of the IMFC and was elected to a three-year term in January. 

Debt relief

According to the United Nations Conference on Trade and Development, Africa's debt levels have surged 183% since 2010 — a rate that is four times higher than its growth rate in gross domestic product terms.

Public debt in Africa reached $1.8 trillion in 2022, with such high levels constraining the ability of countries to cope with unexpected crises or invest in development.

Jadaan said Saudi Arabia's plans to help Africa with its debt crisis — first proposed during Riyadh's hosting of the G20 in 2020 — have "directly impacted" countries such as Chad, Zambia, Ghana and Ethiopia.

"Saudi Arabia believes in the importance of these efforts, and we are committed to continue exerting them," he added.

During the 2020 G20 summit, Saudi Arabia called for the suspension of African debt payments. At the inaugural Saudi Arabia-Africa summit in November 2023, Riyadh continued to press for resolving debt issues in Africa.

Jadaan, speaking at the summit last year, said Saudi Arabia was "working with its partners" to support Ghana and other countries with their debt.

Investment drive

At the FII conference, Jadaan said Saudi Arabia was currently working on enabling $5 billion worth of investments in Africa following preliminary deals signed at last year's summit. He did not mention a timeline for this investment outlay or in which sectors and countries Saudi Arabia intended to invest. 

"It is expected that the private sector investments will reach $25 billion in Africa in the coming 10 years," he added.

Total Saudi investments in Africa reached nearly $13.20 billion last year, with around 47 Saudi companies currently operating across the continent, according to government figures released after last year's summit.

Bilateral trade between Saudi Arabia and the African continent reached $45 billion in 2022, down from the record $80 billion recorded in 2021, while Saudi non-oil exports to Africa grew by 5.96% between 2018 and 2022, reaching around $9 billion last year.

Saudi Arabia has also offered credit lines to African countries such as South Africa and Mauritania. On Oct. 14, the Saudi Export-Import Bank signed a $25 million credit agreement with South Africa's Standard Bank Group to enable trade between the two countries.

In August, the Saudi EXIM Bank and the Mauritanian Investment Bank signed an agreement for $10 million in credit to the African nation to boost trade.

Rosaleen Carroll contributed to this report.