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Africa Debt Boom May Store Up Trouble For The Future

The National Heroes Stadium in Lusaka, Zambia. The country is in talks with China about renegotiating its bilateral debts. Image: Waldo Swiegers/Bloomberg News

BY ANNA ISAAC


Cheap borrowing has fueled bond issuance, but repayment deadlines in coming years are raising concerns

African countries have loaded up on dollar debt, leading some to worry that a tightening of global financial conditions could trigger borrowing problems in coming years.

In the decade through 2019, debt levels in sub-Saharan countries excluding South Africa have risen 23 percentage points to around 50% of gross domestic product, according to the Institute of International Finance, a banking industry research group. Much of that issuance has occurred in dollar- or euro-denominated bonds issued in the past three years.
Driving the issuance: copious demand from international investors for higher-yielding debt, combined with a slide in local currencies and commodity prices that has crimped government revenues.

The oil…

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