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File Image: A man walks past the International Monetary Fund (IMF) logo.
The International Monetary Fund says debt vulnerability in sub-Saharan Africa is mounting due to high global uncertainty, tighter global financial conditions and rising borrowing costs.
However, it says the region is tackling this issue head-on and public debt ratios have stabilized on average.
According to the Funds’ analytical note in the latest Regional Economic Outlook for sub-Saharan Africa data, countries aiming to sustainably reduce debt should seize the opportunity to tax and spend more efficiently.
“Data shows that contrary to perception, countries in the region have often been able to stabilize or reduce their debt ratios without debt restructuring. IMF says the debt decline in many cases was economically significant and persistent. it says that sustained debt reduction typically reflects both budgetary consolidation and real economic growth.
The IMF says key policymakers should ensure that fiscal adjustment is likely to result in stronger, more durable reductions in debt when complemented by pro-growth structural reforms and by measures to strengthen institutional frameworks.”
Budget 2022 | Role of IMF and World Bank in SA’s international loans, grants
