Addressing sovereign debt is crucial to building a vibrant and resilient insurance industry in Africa, the governor of the National Bank of Ethiopia (NBE), Mr Mamo Mihretu, has said.
He was speaking at the 51st African Insurance Organisation (AIO) Conference and General Assembly that took place on 24-28 May 2025 in Addis Ababa, Ethiopia. The conference theme was “Balancing the Books: Africa’s Debt Problem — Why Does Country Debt Impact Insurance”.
Mr Mihretu said that many African nations are undertaking critical economic adjustments supported by international financial institutions and debt restructuring efforts, reported the Ethiopian News Agency.
However, he warned that success requires strong international coordination amid rising global uncertainties.
“For insurers, sovereign debt levels are not just numbers on the balance sheet; they shape investment strategies, asset-liability matching, and, of course, consumer confidence as well.”
Addressing debt challenges, therefore, is integral to building a vibrant and resilient insurance industry, he stressed.
AIO president, Ms Patty Karuaihe-Martin, said that Africa's debt is rising at an alarming rate, placing enormous pressure on developing economies. She noted that 20 low-income African countries are currently in or at risk of debt distress.
She said that rising public debt hampers investment in essential services, and could lead to growing inequality and underdevelopment.
Looking ahead, she called for stronger collaboration across Africa and welcomed efforts to build a harmonised regulatory framework under the African Continental Free Trade Area agreement to enhance intra-African insurance cooperation.