Let’s begin with debt. How serious is Africa’s debt situation?
I prefer to say that Africa has a liquidity access problem, which is a debt servicing issue. Compared with other regions globally, African economies are the least financed. As a result, they have difficulties rolling over their debt.
African economies also have difficulties funding structural reforms. Africa’s dependency on FDI [foreign direct investment] is very much influenced by interpretations of risk that are not aligned with reality because the return on investment in Africa is higher than in other regions.
Also, Africa is the only region where credit rating agencies apply national ratings across all activities. For instance, if country X has a bad rating, an…
