Most African policymakers have struggled to keep their debt sustainable and their fiscal heads above water in 2022. Few cannot repay their loans and have sought debt restructuring and fiscal support from the International Monetary Fund, and many are at the verge of debt distress.
Going by the World Bank and International Monetary Fund (IMF) 's joint debt sustainability index, 19 out of the 35 low-income African countries are either in debt distress or have a high risk of debt distress. Lower middle-income countries in the region, such as Ghana and Nigeria, also have moderate debt distress risks. Essentially, African countries are struggling to sustain their debt.
One of such countries, Zambia, defaulted on its Eurobond loan in 2020. The Ghanaian government has had to reassure its commercial creditors that they won't get a haircut to assuage the fears around the government’s ability to continue repaying its debt.
Therefore, one conversation in many development circles, particularly during the just concluded IMF and World Bank Spring meetings, is the request for debt forgiveness—especially for African countries in debt distress. Debt relief for heavily indebted poor countries (HIPC) might