Is Africa really in a debt crisis?

In depth
This article is part of the dossier: Africa’s new debt deals

By Gaëlle Arenson
Posted on Wednesday, 8 June 2022 11:40, updated on Tuesday, 14 June 2022 17:41

The number of African countries at risk of debt distress has doubled since Covid-19, but only three of them have opted for debt restructuring. At the same time, the issuance of Eurobonds has continued. Is this a sign of a new maturity?

This is part 2 of a 5-part series

Paris, 22 March. The debate, organised by the Franklin law firm, on the renegotiation of the sovereign debt of low-income countries, particularly those in Africa, is lively. The divergence of views between Michel Sapin and Lionel Zinsou is obvious. The former, an ex-French economy and finance minister, is concerned about the resumption of debt service payments in these countries, which are unable to sustain their liabilities. “We are at a crucial moment; decisions must be made to avoid irreparable damage,” he says.

Also in this in Depth:

Should we stop making a fuss about African debt?

The economic consequences of the Covid-19 crisis have revived fears about the indebtedness of African countries. Is this alarmism justified? We investigate this question in our four-part series.

African debt: What about the role of rating agencies?

The global leaders in financial ratings for debt are once again facing a salvo of criticism from some 60 development actors. Here are some explanations and responses from the institutions in question.

Angola, Côte d’Ivoire, Senegal…countries where debt has exploded

The level of external debt has risen sharply since 2015, but not all countries are in the same boat. Their capacity to cope with the challenge differs greatly. We look into this situation in part 4 of our series.

Are banks in the hot seat?

In a recent note, the IMF warns against the growing interdependence between banks and governments. According to the institution, this is a relationship that could sustain “a vicious circle” in these times of crisis.