Nigeria, seven other African countries in debt distress, says World Bank

The World Bank has said eight countries in sub-Saharan Africa are in debt distress, and 14 are at high risk of joining them.

The bank said the countries are part of 38 countries eligible for the International Development Association loans.

The countries in sub-Saharan Africa include Nigeria, Angola, Kenya, South Africa, Ghana, Chad, Ethiopia and others.

The Washington-based organisation said this in its latest Africa’s Pulse report, released on Tuesday.

Africa’s Pulse is a biannual analysis of the near-term macroeconomic outlook for the region.

It said that African governments spent 16.5 percent of their revenues servicing external debt in 2021, up from less than 5 percent in 2010.

The bank said that debt is projected to stay elevated at 58.6 percent of gross domestic product in 2022 in SSA.

“At the same time, high commercial borrowing costs make it difficult for countries to borrow on national and international markets while tightening global financial conditions are weakening currencies and increasing African countries’ external borrowing costs,” the report adds.

The report also said that Sub-Saharan Africa’s economy would grow 3.3 percent this year, down from 4.1 percent in 2021.

It attributed the decline to a slowdown in global growth, including flagging demand from China for commodities produced in Africa.

The World Bank said the war in Ukraine has continued to exacerbate already high inflation and weighing on economic activity by depressing both business investments and household consumption.

It said that as of July 2022, 29 of 33 countries in Sub‐Saharan Africa with available information had inflation rates over 5 percent while 17 countries had double-digit inflation.

The report said, “Elevated food prices are causing hardships with severe consequences in one of the world’s most food-insecure regions.

“Hunger has sharply increased in SSA in recent years, driven by economic shocks, violence and conflict, and extreme weather.

“More than one in five people in Africa suffer from hunger, and an estimated 140 million people faced acute food insecurity in 2022, up from 120 million people in 2021, according to the Global Report on Food Crises 2022 Mid-Year Update.

“The interconnected crises come at a time when the fiscal space required to mount effective government responses is all but gone.”