MANAGING AFRICA’S RISING DEBT: TIME FOR A MULTI-PRONGED APPROACH

The document examines the shift in Africa's debt structure toward non-concessional and domestic loans, identifying drivers such as commodity price shocks and fiscal deficits. It assesses the debt-carrying capacity of various African nations using IMF and World Bank frameworks, noting that several countries are in debt distress or at high risk. The briefing details current coping mechanisms, including the issuance of long-term Eurobonds and novel financial products, and recommends enhancing domestic revenue mobilization, economic diversification, and the establishment of autonomous debt management offices.

• Africa is experiencing a shift in debt structure toward non-concessional and domestic debt with higher interest rates, with concessional loans as a share of external loans dropping from 66% in 2005 to 54% in 2016.
• Debt sustainability is a critical concern, with 19 of 54 African countries exceeding the 60% debt-to-GDP threshold of the African Monetary Co-operation Programme (AMCP) and 24 countries surpassing the IMF's 55% debt-to-GDP ratio.
• Several factors drive rising debt, including the 2014 commodity price shock, exchange rate volatility, political instability, and deteriorating macroeconomic conditions. Sub-Saharan Africa's real GDP growth fell from 5.3% in 2013 to 2.8% in 2016.
• A significant number of African countries face high risk of debt distress or are already in distress. Sudan, The Gambia, Mozambique, Chad, and Zimbabwe have surpassed all sustainability thresholds, with Sudan's public debt exceeding 116% of GDP.
• Countries are managing debt by extending maturity through long-term Eurobonds (typically 30 years) in nations like Kenya, Côte d’Ivoire, Egypt, Morocco, South Africa, and Nigeria, and by introducing inflation-linked bonds in Zambia, Namibia, and South Africa.
• Domestic revenue capacity remains insufficient for development, with an average tax revenue-to-GDP ratio of approximately 15%, well below the 25% benchmark required.

APA

ADENIRAN, A., EKERUCHE, A., BODURIN, S., ALE, A. A., MANDRI, B., & TAYEB, G. (2018). MANAGING AFRICA’S RISING DEBT: TIME FOR A MULTI-PRONGED APPROACH. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2018/11/GA_PB_Adeniran-et-al_20181126_GEG-1.pdf

Chicago

ADENIRAN, ADEDEJI, AMARA EKERUCHE, SAMUEL BODURIN, ABDELAAZIZ AIT ALE, BADR MANDRI, and GHAZI TAYEB. MANAGING AFRICA’S RISING DEBT: TIME FOR A MULTI-PRONGED APPROACH. South African Institute of International Affairs, 2018. https://saiia.org.za/wp-content/uploads/2018/11/GA_PB_Adeniran-et-al_20181126_GEG-1.pdf.

Wikipedia

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BibTeX

@techreport{adeniran2018managing, author = {ADENIRAN, ADEDEJI and EKERUCHE, AMARA and BODURIN, SAMUEL and ALE, ABDELAAZIZ AIT and MANDRI, BADR and TAYEB, GHAZI}, title = {{MANAGING AFRICA’S RISING DEBT: TIME FOR A MULTI-PRONGED APPROACH}}, institution = {South African Institute of International Affairs}, year = {2018}, month = nov, url = {https://saiia.org.za/wp-content/uploads/2018/11/GA_PB_Adeniran-et-al_20181126_GEG-1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }