Indebtedness in sub-Saharan Africa: The shadow of COVID-19
This trade brief will provide an overview of the state of indebtedness (including both public and private debt) for sub-Saharan Africa (SSA). This will cover the period of 2015-2021, with a specific focus on the effect of the COVID-19 pandemic on indebtedness in the continent. Data sources consulted include the latest International Monetary Fund’s (IMF) Regional Economic Outlook (April 2021) and World Bank databank, particularly the International Debt Statistics.
Debt-to-gross domestic product (GDP) levels in sub-Saharan Africa have doubled over the last decade to over 56%. Coupled with record economic contractions across the region as a result of COVID-19, this is a recipe for a debt crisis. Moreover, it will be increasingly difficult for countries to finance themselves in a slow or even recessionary economic environment in the absence of a globally available vaccine. Scarcely a decade since the IMF and World Bank launched the Highly Indebted Poor Countries (HIPC) initiative, which slashed the debt burden of some 30 low-income countries on the continent, politicians and campaign groups across the continent have called for outright debt cancellations, in addition to requests for longer suspensions of servicing and repayments for the continent’s poorest countries.
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