African Debt a Growing Problem But Not a Crisis

Project Syndicate published on 23 May 2018 an analysis titled "The Debt Challenge to African Growth" by Abebe Aemro Selassie, International Monetary Fund.

Much of the commentary on African debt recently has been hyperbolic, but there is a growing problem. Sub-Saharan Africa is confronting a pronounced rise in public debt. At the end of 2017, average public debt in the region was 57% of its GDP, an increase of 20 percentage points in just five years. Six of the region's 35 low-income countries (LICs) are in "debt distress," meaning they are unable to service external commitments. A further nine LICs are classified as being at "high risk of debt distress."

The author argues that if Sub-Saharan Africa is to take full advantage of the current global economic upswing, policymakers must tackle public-debt vulnerabilities head-on while they can. Doing nothing will only constrain the region's potential to achieve sustainable and inclusive growth.