2023-10-25 12:00:00
SAccording to a World Bank report, the average ratio of public debt of sub-Saharan African countries to GDP has doubled in ten years, going from 29% in 2012 to 57% in 2022.
“The risks of over-indebtedness in the region have worsened since the Covid-19 pandemic,” note its authors due to both the widening budget deficits and the slowdown in economic growth. The proportion of countries in the region presenting a high risk or already in a situation of debt distress, which was 27% in 2015, reached 55% at the end of June 2023.
As a result of the increase in debt and the rise in interest rates, the debt burden of sub-Saharan African countries, that is to say the amounts devoted to the payment of interest, increased by 50 billion dollars between 2012 and 2022, increasing from 59 to 109 billion.
Increased vulnerability
“The increasing debt service ratio – which has reached a staggering 31% of the region’s revenues in 2022 – is depleting the resources needed for public investments and social programs,” the report highlights.
The increase in public debt in sub-Saharan African countries has also been accompanied by a change in its composition. With, on the one hand, a drop in the share of so-called “concessional” loans – that is to say granted at preferential rates within the framework of public development assistance – and on the other, an increase bilateral loans contracted from private creditors. According to the World Bank report, this reconfiguration constitutes a source of increased financial vulnerability.
READ ALSO Kenya, its debt and FranceFinally, the dollar remains the predominant currency for the external debt of sub-Saharan African countries and has even seen its share increase since 2010. In 2021, the dollar alone represented 74.3% of their loans denominated in foreign currencies. foreign currencies, the euro 9.9% and other currencies 12.6%.
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