Browsing: Debt default in Africa

• As national debts grow, many African countries find themselves spending more on debt than on health.
• IMF says the debt ratio in Sub-Saharan Africa surged to 60% from 30% of the countries’ GDP between 2013 and December 2022.
• Kenya is for instance using nearly 60% of its annual revenues on paying debt obligations.

As the Africa debt crisis roils, over half of the countries have found themselves spending more money in servicing their loan obligations than even the amount they have budgeted for health services to their citizens.

This unfolding scenario is further burdening millions of their citizens who have little choice but to shoulder heavy tax burdens to settle mountains of debt.

Prof Danny Bradlow, a Senior Research Fellow at the Centre for the Advancement of Scholarship in Pretoria, South Africa, captures the dire situation, stating: “over the  last three years (2019/22), more than 25 African governments allocated …

• Experts project that Côte d’Ivoire seeks to sell its Eurobond and around 8.50 per cent to 8.75 per cent for a ticket size of between US$1 billion to US$1.25 billion.
• Ghana, Senegal, Nigeria, and Côte d’Ivoire have been key players, with the values of their Eurobond issuances typically ranging from $200 million to $1 billion.
• The annual value of Eurobonds issued by West African governments witnessed a remarkable surge, increasing from $200 million in 2007 to $2.25 billion in 2014.

As the markets open in the new year, all eyes turn to Côte d’Ivoire, which has announced a plan to lead the continent in issuing a Eurobond—the first in Africa after a nearly two-year break.

Positioned on the verge of economic resurgence in 2024, Côte d’Ivoire is poised to become the first sub-Saharan African nation to issue a Eurobond as the global financial markets ease following a period of high …

• In a body blow, Fitch Ratings has moved Ethiopia’s rating from “CC,” where it had been downgraded in November, to the new status of “C”.
• This adjustment reflects the agency’s deepening concerns about Ethiopia’s economic health and the rising risk of default following a missed interest payment on 11 December.
• A further severe downgrade by Fitch Ratings to ‘restricted default’ (RD) looms if Ethiopia fails to make the coupon payment within the set 14-day grace period.

Fitch Ratings agency has served Ethiopia’s economy a gut punch by further downgrading Ethiopia’s credit rating into junk territory, expressing concerns about the “increased likelihood” of default by the second most populous country in Africa.

This economic setback for Ethiopia, home to approximately 120 million people, comes as a result of the country’s failure to meet its financial obligations to creditors. Specifically, Ethiopia was unable to pay a coupon on its single …