Too many African countries are facing existential crises, where human capital and socioeconomic development targets for quality health and education are at risk given the harsh realities of debt overhang and sovereign debt sustainability.
Nearly 30 African countries are at medium-to-high risk of sovereign debt default, as their rising domestic debt burdens crowd out anemic local private enterprises from the capital markets, and foreign debt burdens drag them toward international insolvency.
Given the historically elevated base rates maintained by central banks the world over to tame runaway inflation, several highly indebted African countries are experiencing the downside of excessive commercial foreign currency borrowings. Learning from this, African countries need to have better access to concessional financing, such as grants and low-interest loans, to reduce their reliance on commercial borrowing.
About the author
Yemi Kale@sgyemikale
Dr. Yemi Kale is the group chief economist and managing director of research and international cooperation at Afreximbank, Egypt. He was formerly a partner and chief economist at KPMG, Nigeria. Prior to this, he served as the statistician general and CEO of the National Bureau of Statistics, Nigeria.
