Nigeria recently secured a $2.25 billion World Bank loan to support reform efforts and alleviate the cost-of-living crisis affecting over 60% of its population. Ghana also finalised a $5.4 billion debt restructuring with bilateral creditors on June 12, including China and France, and reached a $13 billion agreement in principle with international bondholders on June 21.
Debt sustainability has posed a significant risk to sub-Saharan African countries since Zambia and Ghana defaulted in 2020 and 2022, respectively. The IMF reports that SSA’s total external debt owed to multilateral, bilateral, and commercial creditors, including bondholders, rose 22.27% from $658.79 billion in 2018 to $805.51 billion in 2023. The IMF estimates this debt will reach $867.67 billion in 2025, accounting for 44.88% of the region's GDP.
Amid the high interest rate environment globally, interest payments have become unsustainable, making foreign investors cautious about the SSA region. For context, the US Federal Reserve
