By The International Monetary Fund (IMF) unveiled its April 2024 Regional Economic Outlook for Sub-Saharan Africa, signaling a gradual enhancement and an upswing in economic operations.
The IMF anticipates that regional growth will ascend from 3.4% in 2023 to 3.8% in 2024, with the trajectory of recovery poised to extend beyond this period, reaching 4.0% by 2025.
Notwithstanding this optimistic prognosis, African administrations grapple with persistent hurdles, encompassing fiscal constraints, elevated borrowing expenses, and the specter of debt rollovers.
Additionally, the report underscores the looming specter of substantial external debt repayments, with $5.9 billion in Eurobonds maturing in 2024 and an additional $6.2 billion in 2025.
IMF officials recognized the hurdles posed by these repayments, especially for nations such as Kenya, Nigeria, and South Africa.
Kenya has sought relief by tapping into the markets, while Nigeria and South Africa are deliberating Eurobond issuance as potential strategies.
The IMF stressed the anticipation of enhancements in the G20 Common Framework, alongside continuous endeavors to aid nations like Ghana in steering through international debt negotiations toward favorable economic and growth outcomes.
Luc Eyraud, the IMF Division Chief of the African Department, stated, “It’s mostly concentrated in three countries: Kenya, Nigeria, and South Africa. Kenya has re-accessed the markets, so it’s moved a little bit of pressure when you have to face debt repayments. Nigeria is also considering a Eurobond. South Africa is a bit of a different case because they have a very large domestic market, so their liquidity problems in terms of debt repayments are less severe than in other countries.”
Catherine Pattillo, the IMF Deputy Director of the African Department, also added, “There are areas where the common framework needs improvement. One thing the IMF has been doing is this global sovereign debt roundtable, which brings together various countries and creditors from both the public (official) and private sectors.”
