Pre-emptive debt restructuring: a viable scenario for fragile African sovereigns?

The expiry of Covid-19-related support coupled with a surge in the goods import bill has exacerbated pressure on external trade positions for various African sovereigns. We see headwinds intensifying from 2023 onwards in the form of a deepening drought in East Africa, populist-leaning policies aimed at appeasing voter frustrations, large redemptions of external public debt facilities, and moral hazard. The risk profile is fragmented but a common thread can be found across Africa: sovereigns face an uphill battle in meeting the projected external funding requirements. With the risks of disorderly default on the rise and informed by the Zambian blueprint, we investigate the case for pre-emptive debt restructuring for fiscally fragile nations including Egypt, Ghana, and Kenya.

Irmgard Erasmus

Senior Financial Economist, Oxford Economics Africa

+27 (0) 83 282 0497

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Private: Irmgard Erasmus

Senior Financial Economist, Oxford Economics Africa

Cape Town, South Africa

Irmgard is a senior financial economist at Oxford Economics Africa and is responsible for the firm’s fixed income and FX coverage of Africa. She joined Oxford Economics Africa as a macroeconomist and fixed income analyst from JP Morgan and has more than a decade’s experience in the realm of Africa’s financial markets.