To have only 3 of the eligible countries in Africa signing up for the initiative is tragic especially given the global economic environment of the world presently. A crippling sovereign crisis is looming on the African horizon. Catalysts of the crisis include a strong United States dollar which has been resurgent during the year.
Debt on the on the books of most African countries is denominated in the greenback and its strength will have an adverse impact on their public finances and their ability to service their loan obligations timeously.
This problem is further compounded by rising interest rates which are certain to make the cost of debt that much more expensive for countries that already cannot afford to be overextended financially.
The debt of most African countries is in the hands of private creditors who in recent time have become as important as their multilateral counterparts. These private creditors are less likely to be concessionary in terms of discussions around restructuring of debts.
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