Africa Club launches early warning system to prevent sovereign debt crises

The Alliance of African Multilateral Financial Institutions (AAMFI), also known as the Africa Club, has reportedly launched an initiative to establish early warning systems aimed at identifying potential sovereign debt challenges among African borrowers.

The initiative seeks to provide a framework for collective support and prevent chaotic debt restructurings like those recently experienced in Ghana and Zambia.

Samaila Zubairu, AAMFI Chairman and Chief Executive Officer of the Africa Finance Corporation (AFC), emphasized the importance of developing tools to mitigate fiscal stress and enable collaborative interventions before crises escalate into public disputes, credit downgrades, or arbitration.

“Founded in 2024 amid tensions over African multilateral lenders being drawn into complex debt workouts—despite their shareholder ties to borrowing countries—the group aims to safeguard long-term relationships and avoid exacerbating fiscal strains,” noted a recent commentary by Access Bank group.

On the international front, China’s manufacturing activity recorded a modest uptick in January, according to the private RatingDog Purchasing Managers’ Index (PMI), which edged up to 50.3 from 50.1 in December.

The figure contrasts with the official PMI, which unexpectedly weakened, and reflects stronger performance among smaller, export-oriented firms benefiting from resilient global demand.

Despite this improvement, China’s broader economic outlook remains subdued, with policymakers showing limited appetite for major stimulus.

Analysts highlight ongoing local government debt risks and an acceptance of slower growth, even after the country recorded five percent GDP expansion last year, driven by record exports that offset weaker domestic consumption and investment.

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