IMF Response to Indebtedness in sub-Saharan Africa: Rays of Hope combating the shadow of COVID-19
The state of indebtedness in sub-Saharan African has been extensively detailed in a previous tralac trade brief. That brief showed that the region was already struggling with high levels of indebtedness before the COVID-19 pandemic. Specifically, debt-to-GDP ratios had already been rising sharply before the outset of the pandemic and have only worsened since. It is therefore crucial that countries in the region seriously consider the levels of their debt sustainability and take corrective steps in ensuring that it does not spiral out of control.
Unfortunately, the continent finds itself in this worrying state hardly a decade since the IMF and World Bank launched the Highly Indebted Poor Countries Initiative (HIPC) which slashed the debt burdens of about 30 low-income countries on the continent. Fortunately, there are several International Monetary Fund (IMF) channels available to mitigate the debt burden and provide for debt relief, which will be the focus of this paper.
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