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COVID has had a Profoundly Negative Impact on Africa’s Sovereign Debt Situation

Currently, 22 countries are either in debt distress or at high risk of debt distress. This means that African governments are struggling to pay the debts that they incurred on behalf of their states. For example, Mozambique and Zimbabwe are already in debt distress. Others at high risk include Malawi, Zambia and Comoros. This situation is likely to be exacerbated by the war between Russia and Ukraine. The conflict is causing commodity prices, particularly food and gasoline, to rise. It is also disrupting the supply chains of critical goods like fertilisers. The ability of countries to manage their debt is complicated by the changing composition of the debt. They now owe more money to a broader range of creditors. In 2020, sub-Saharan Africa had a total external debt stock of $702.4 billion, compared to $380.9 billion in 2012. The amount owed to official creditors, including multilateral lenders, governments and government agencies, increased from about $119 billion to $258 billion.