Africa needs international relief from a vicious funding squeeze that has left as many as eight of its countries requiring debt restructuring, an International Monetary Fund official said.
(Bloomberg) — Africa needs international relief from a vicious funding squeeze that has left as many as eight of its countries requiring debt restructuring, an International Monetary Fund official said.
“In sub-Saharan Africa, the picture is really quite varied,” IMF Director of the African Department Abebe Selassie said Thursday in an interview on Bloomberg Television with Jennifer Zabasajja in Marrakech, Morocco during the annual meetings of the lender and the World Bank.
“The number of countries where debt is unsustainable and need restructuring is about seven, eight now,” he said. “In most other cases what we are seeing is heightened debt vulnerabilities.”
Ghana and Zambia have both sought IMF emergency bailouts and are in the process of restructuring their debts, while investors are keeping watch on Kenya, Angola, Malawi and Mozambique, among other heavily-indebted countries on the continent.
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Selassie repeated that he was confident of Zambia and its creditors reaching a deal in the next few days, with terms having been agreed in substance.
The IMF expects growth in sub-Saharan Africa to slow to 3.3% this year from 4% in 2022, before bouncing back to 4% next year. But it cautions that a recovery is not assured.
Read more: IMF Sees Rebound on Horizon for Africa’s Floundering Economies
The region was slammed by the pandemic and surging food prices after Russia’s invasion of Ukraine, with soaring inflation leading to aggressive interest-rate increases around the world. That’s led to a funding squeeze amid rising debt-service costs and weakening currencies.
Selassie said that in addition to helping those nations requiring debt restructuring, the international community should address the needs of the rest of the region.
“That’s where we’re working to try to mobilize more resources for countries. Ourselves providing more resources,” he said. “And also of course, these resources are to support policies that are needed to get countries back to the more dynamic ways they were before the pandemic.”
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