Eurobonds, Debt Sustainability in Africa and Credit Rating Agencies
This policy paper assesses the role of Credit Rating Agencies on the cost of borrowing on the international capital markets for African countries and the impact of downgrading on selected African countries that have issued Eurobonds. This has resulted in billions of dollars being lost to fiscal space and service delivery to those most in need.
It analyses the shift in Africa’s debt structure towards an increased share of private financing and the associated risks and opportunities, with a particular focus on Eurobonds. The paper also examines the rising concerns about Africa’s debt sustainability, especially in relation to the upcoming Eurobonds wall of maturities and the risk of debt default.
It assesses the performance of the investment of debt proceeds in infrastructure development and the relationship between public expenditure, governance, and borrowing and underscores the responsibility of African Countries to change their reality by owning their narrative and changing the perception. In conclusion, it provides recommendations to maximize financing opportunities and sustain future access to international capital markets as African countries emerge from the COVID-19 pandemic and build forward better. Read the policy paper in
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