The government debt burdens across sub-Saharan Africa are rising at a faster pace and to higher levels than in other emerging markets, according to the latest Fitch Ratings report.
A number of countries in the region are now in danger of slipping into a major debt crisis. Eight countries are already in debt distress, while a further 18 are at high risk of distress, heightening the risk of rating downgrades and defaults.
According to the report, titled Rising Debt Distress in Sub-Saharan Africa, the numbers of defaults have more than doubled since 2013.
The coronavirus pandemic has hit economies through the fall in oil prices, tourism numbers, remittances and global trade, disruption to economic activity, pressure on exchange rates, rise in risk premiums, and diminished market access.
The pressure is reflected in respective countries’ external finances. Fitch forecasts that the median of public and private-sector net external debt will increase to 41 per cent of countries’ GDP at end of 2020, from two per cent in 2011, and external debt service payments will rise to 18 per cent of current external receipts (CXR) this year from five per cent in 2012. Read more…
