IN DECEMBER 2023, Ethiopia became the third African country in as many years to default on its global debt payment. It was supposed to pay $33 million to holders of the country's only international government bond on December 11 but failed to do so even after the 14-day grace period ended on December 25. Zambia and Ghana are the other two countries to have defaulted on their debt since 2020.
Several African nations are faced with a debt crisis. Many of them have faced downgrades from prominent credit rating agencies in the past five years. These nations include Kenya, Morocco, Nigeria, Ghana and Egypt. Speaking at the World Economic Forum in Davos on January 17, Nonkululeko Nyembezi, chairperson of Standard Bank Group, the continent's biggest bank by assets, said that sovereign-debt crisis is the biggest issue facing Africa. Sample these cases. Nigeria is in talks to secure as much as $1.5 billion in budget support from the World Bank. Zambia's bilateral creditors have rejected a plan to restructure its $3 billion in Eurobonds-a debt instrument issued in a currency other than that of the home country or market. Kenya has secured $685 million from the International Monetary Fund and raised a $210 million loan from the Trade and Development Bank before its $2 billion Eurobond repayment is due in five months.
This story is from the February 16, 2024 edition of Down To Earth.
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This story is from the February 16, 2024 edition of Down To Earth.
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