African countries need not fear default
Friday, January 15, 2021
FRANKFURT – Since the COVID-19 crisis began, the spectre of sovereign default has loomed over developing economies. Many sovereigns are so afraid of losing market access that they are unwilling to address debt-sustainability problems. Yet a clear-eyed look at the impact of the COVID-19 crisis, together with the fiscal and financing realities for low-income countries, reveals a “new normal,” in which a timely default is far from the worst-case scenario.
According to World Bank estimates, half of the world’s poorest countries are now in or at risk of debt distress. In Sub-Saharan Africa, for example, solvency metrics have deteriorated significantly this year, following six years of gradual weakening linked to declining global commodity prices. Angola, Ghana, and Nigeria spend close to half of their government revenues on interest payments. For the 19 Sub-Saharan African sovereigns that it rates, S&P Global Ratings estimates that two-thirds of all interest payments go to private creditors.
These legal professionals, who are entrusted with upholding the rule of law, face numerous challenges that compromise their ability to effectively carry out their duties.Elsewhere in this edition, we carry a story on the lamentations of the officers of court.The prosecutors have raised a number of concerns, calling for urgent attention from all relevant stakeholders, including the President, Minister of Justice and the Attorney General. Their...