By BUUMBA CHIMBULUTHE Covid-19 is expected to markedly increase the vulnerability of the Sub Saharan region to debt distress, the World Bank Group (WBG) has warned.It said Government debt had already risen to 60 percent of Gross Domestic Product (GDP), on average, in 2019 almost double the level in 2013.According to the Group, the composition of debt had also become riskier, with a greater share owed to non-concessional lenders at a higher cost.These strains, it explained in its latest edition released this month, would be compounded by the increased borrowing required to fund larger deficits.“In addition, borrowing costs across the region have risen sharply given heightened risk aversion, placing further pressure on fiscal capacity.“Significantly larger, and more expensive, government debt burdens than last year mean that the risk of sovereign debt defaults has increased, and may rise further if the projected recovery in activity were to disappoint,” the WBG said.It also said severely constrained government […]
Africa’s debt distress rising – WB
