Sub-Saharan Africa faces debt crunch unless commodity prices improve
Abuja — Sub-Saharan Africa faces a potential debt crunch unless commodity prices improve and boost the pace of economic growth. The region’s median government debt level will probably exceed 50% of GDP this year from 34% in 2013, while the cost of servicing the liabilities will average almost 10% compared with half that four years ago, the International Monetary Fund (IMF) said. There are no investment-grade, dollar-debt issuers in Sub-Saharan Africa after Moody’s Investors Service and Fitch Ratings cut Namibia to junk this year. Commodity returns have dropped in six of the past seven years and expectations for slower growth in China, the biggest consumer, don’t bode well for African nations that depend on mining, crops and oil for the bulk of their income. The region’s growth may average 2.6% this year, almost double 2016’s level, but barely above population expansion, with delays in making policy changes risking this, the IMF said in October.