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African Finance Ministers trying to Manage Debt are Having it Tough

First the pandemic slammed their finances. In December a pandemic-inspired scheme to suspend interest payments to bilateral creditors ended. It had delayed debt problems but did not fix them. In February Russian tanks rolled into Ukraine and jumpy investors began to ditch African government bonds. In March the Federal Reserve began to raise interest rates, which will make financing pricier everywhere. Meanwhile, China, a big economic partner for the continent, is struggling because of a rumbling property-debt problem of its own and lockdowns to slow covid-19. The good news is that few countries in sub-Saharan Africa need to make big principal repayments to private creditors this year. It is therefore unlikely that there will be bond defaults in sub-Saharan Africa in 2022, even as countries elsewhere miss payments, says Gregory Smith, an economist and fund manager.