African economy

Opinion

African countries are not good at issuing bonds, which means the cost of debt is higher than it should be. What changes are required?

African countries face a puzzling paradox: although they are paying more for the debt they are raising, demand for these bonds is much higher than supply - often oversubscribed by over five times.
Various currency notes of African countries are seen in this photo
Politics & Policy

Is the war in Sudan the cause of the economic crisis in South Sudan? What is really going on with oil revenue?

South Sudan’s ability to attract new loans depends on the repayment of existing ones. These repayments largely depend on oil production. As the 2024-24 budget shows, South Sudan desperately needs new loans to keep even core state functions operational
Sudan's largest and important port, filled with shipping containers
Economy

Credit rating agencies and Africa: lack of people on the ground fuels bias against continent

The big three rating agencies have a thin presence in Africa, raising questions about analysts' workloads and the accuracy of their ratings — not to mention a bias towards their home regions
The headquarters of Fitch Ratings in the financial district of lower Manhattan, New York
OpinionPolitics & Policy

What’s driving Africa’s youth-led protests?

While many of the protesters' demands are unlikely to be met, the demonstrations underline the urgent need for fundamental reform, not just in Kenya or Nigeria, but across Africa
Two men hold placards at a demonstration in Washington D.C. in June 2024. They were part of a demonstration by Kenyans living in the United States in solidarity with mass protests then taking place back home.
OpinionPolitics & Policy

China benefits most from its relations with Africa: where’s the imbalance?

The eight Focac summits since 2000 have not resulted in mutual gain, particularly in trade and industrialisation for Africa, with China reaping most of the benefits
Chinese President Xi Jinping inspects a guard of honour during a state visit to South Africa in July 2024.
EconomyHealth

Fitch warns mpox outbreak could dent regional economies

An escalation of the mpox outbreak in sub-Saharan Africa could lead to a slowdown in economic activity and financial distress for governments of the affected countries
Various currency notes of African countries are seen in this photo
EconomyEnvironmentPolitics & PolicyProperty

Raising revenue from land: what African cities can learn from Hong Kong’s unique leasehold system

Often cited as a prime example of effective land value, Hong Kong uses a variety of land-based financing models that have proven effective in funding key public projects
Final approach to Hong Kong with views of Victoria Harbour and Stonecutters Bridge in the early morning, July 2016
EconomyPolitics & Policy

The IMF is failing countries like Kenya: why, and what can be done to stop it

IMF’s declining resources relative to the size of the global economy has meant less funding than members need, forcing austerity and weakening its bargaining position in crises
Street art in Dublin against IMF/EU debt, June 2013. The recent Kenyan anti-tax protests are a warning that the International Monetary Fund (IMF) is failing. The public does not think it is helping its member countries manage their economic and financial problems, which are being exacerbated by a rapidly changing global political economy. The IMF has provided financial assistance to Kenya; however, the funding comes with strict conditions that suggest debt obligations are more important than the needs of long-suffering citizens. This is despite the IMF's claim that its mandate now includes helping states deal with issues such as climate, digitalisation, gender, governance, and inequality. Unfortunately, Kenya is not an isolated case. Twenty-one African countries are receiving IMF support. In Africa, debt service, on average, exceeds the combined amounts governments are spending on health, education, climate and social services. The tough conditions attached to IMF financing have led the citizens of Kenya and other African countries to conclude that a too powerful IMF is the cause of their problems. However, research into the law, politics and history of the international financial institutions suggests the opposite: the real problem is the IMF’s decline in authority and efficacy.
EconomyOpinion

The liquidity crisis in developing countries is not over

External debt ratios of low-income and lower-middle-income countries are lower than before, but liquidity pressures have increased due to various shifts in the global economy
Globe weighed down by a chain and labelled 'debt': global debt crisis, economic burden, financial instability, liquidity crisis
EconomyPolitics & Policy

Africa’s debt crisis demands a bold new approach

Africa cannot rely on the global community to provide adequate funding or debt relief to address its development needs and crises, such as pandemics or extreme weather events
South African President Cyril Ramaphosa and other G20 leaders at the opening ceremony of the 2023 G20 Leaders' Summit in New Delhi, India, on 9 September 2023. The G20 agreed a Common Framework that was supposed to help resolve the sovereign debt crises in low income countries. Four African countries applied to have their debts restructured through the framework. Despite years of negotiations, it has failed to fully resolve the debt crisis in three of them.
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