Debt is creeping back up in Sub-Saharan Africa


DURING the 1980s, African economies groaned beneath unpayable sovereign debts. By the mid-1990s much of the continent was frozen out of the global financial system. The solution, reached in 2005, was for rich lenders to forgive the loans that “heavily indebted poor countries”, 30 of which were in Africa, had received from the World Bank, IMF and African Development Bank. With fresh credit and better economic policies, many of these countries turned their fortunes around. By 2012 the median debt level in sub-Saharan Africa (as defined by the IMF) fell to just 30% of GDP.

Today,however, the median debt-to-GDP ratio in the region is back over 50%. Although that figure may seem low by international standards, African countries collect relatively little tax and tend to pay high interest rates….

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