CONTINENTAL INITIATIVE
Déjà vu: Africa faces turbulence if it continues to ignore debt crisis alarm bells
Ten of 13 countries in ‘high risk’ or ‘debt distress’ categories are in sub-Saharan Africa
For the past two years analysts have been raising alarm bells about the debt sustainability of some African countries. They caution about the pace of debt accumulation and emerging risks from private-sector borrowing. Despite warnings, debt accumulation continues unabated and, in some countries, has accelerated. So it was not a surprise to hear the governor of the South African Reserve Bank and chairman of the International Monetary and Financial Committee, Lesetja Kganyago, recently lament the debt crisis in low-income, developing countries at his maiden press conference in his new position. However, the IMF missed a few opportunities to avert the emerging problems. To summarise the press conference and the IMF’s board policy note released prior to the annual World Bank/IMF spring meetings: the fund has called for a global dialogue on sovereign debt developments in low-income developing countries as risks of the debt crises in some of them have increased. According to the IMF, Afri...
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