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IMF Calls on African Nations’ Creditors to Step Up Debt Relief Efforts

The head of the IMF’s Africa department has called for a significant increase in international support to help countries overcome a funding squeeze that is jeopardising the continent’s economic development. Abebe Selassie told the Financial Times that reform of the current mechanisms for dealing with unsustainable debts of African countries was “desperately needed”. Many have been shut out of international debt markets since 2020 by “exorbitant” borrowing costs, Selassie said, while finance from China and other new sources of lending had been curtailed, along with development assistance from rich countries. Yields demanded by investors to buy foreign currency bonds issued by governments in sub-Saharan Africa have soared to more than 10 percentage points above those on US Treasury bonds for much of the past year, a gap typically regarded as a sign of severe distress.