Africa s rising debt. Session 1. Debt dynamics in Africa s complex financing landscape. 14:00 15:30

Transcription

1 Africa s rising debt Session 1. Debt dynamics in Africa s complex financing landscape 14:00 15:30

2 ODI Seminar: Africa s Rising Debt NOVEMBER 5, 2018 David Robinson (drobinson2@imf.org) Deputy Director, AFR IMF IMF African Department 2

3 All Countries Have Debt Total Public Sector Debt Total Public Sector Debt to Population 3

4 In SSA a Pick Up in Debt AND Debt Service Sub-Saharan Africa: Total Public Sector Debt Sub-Saharan Africa: Interest Payments 4

5 Increased Number of Countries in Debt Distress Debt Risk Status for PRGT Eligible Low-income Developing Countries Countries at High Risk or in Debt Distress: Cumulative Contribution from Debt Decomposition 5

6 Mixed progress on stabilizing debt, but composition of adjustment can be improved Average Fiscal Balance and Public Debt (percent of GDP) Fiscal Developments

7 Domestic revenue mobilization capturing the returns on public investment needs to advance Greater than 18 percent Between 13 and 18 percent Less than 13 percent Data not available 7

8 Growth is recovering, but is too low over the medium-term. Real GDP Growth Real GDP per Capita Growth 8

9 Africa s rising debt Session 1. Debt dynamics in Africa s complex financing landscape 14:00 15:30

10 Debt Dynamics in Sub-Saharan Africa Doerte Doemeland Practice Manager Global Macro & Debt Unit Macroeconomics, Trade & Investment Global Practice World Bank Group Conference on Africa s Rising Debt ODI, London - November 5, 2018

11 Public debt has increased in Sub-Saharan Africa since Sub-Saharan Africa: Evolution of Public Debt (percent of GDP) Average Median 25th Percentile 75th Percentile Note: Public debt covers general government gross debt. Graph excludes high-income countries. Source: World Economic Outlook Database, October 2018.

12 The composition of public debt in Sub-Saharan Africa shifted towards commercial financing and non-paris Club bilateral creditors Sub-Saharan Africa: Evolution of Domestic Currency Debt (in percent of GDP) Sub-Saharan Africa: Change in Composition of External PPG Debt (in percent of GDP, ) Non-Paris Club bilateral Commercial Multilateral 0 Sub SaharanLow IncomeLower MiddleUpper Middle Africa Income Income Average 2007 Average 2012 Paris Club Bilateral Source: WB Africa Pulse, April Source: International Debt Statistics and WB staff calculations. Excludes IBRD countries.

13 The 2017 revisions of the joint Bank-Fund DSF respond to this evolving financial landscape. The revised DSF is more complete. Realism tools ensure quality of inputs. DSA covers relevant risks not previously analyzed. CI and stress tests use expanded set of country-specific information. Transparency and engagements are enhanced. Tools help to make explicit underlying assumptions. Country classification is derived from additional observable variables. You can better understand and articulate differences in views. The revised DSF has been simplified. Redundant indicators and stress tests have been eliminated. Template has been streamlined, with several features automated.

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16 Conclusion 1. Public debt levels in Sub-Saharan Africa have been rising. While they remain below pre-hipc levels, there is a risk to further increases. 2. Increased reliance on financing in commercial terms has contributed to higher debt service costs and risks, while rising exposure to non-traditional external creditors could complicate crisis resolution. 3. The revised DSF responds to the changing financial landscape: Update (additional data), adapt (liquidity risks), improve (reduced false alarms; greater scrutiny). 4. The World Bank and the IMF are pursuing a multi-pronged approach to help countries address debt vulnerabilities: stronger debt analytics; more debt transparency (creditor outreach on sustainable lending and improved data coverage); and improved debt/fiscal risk management, including scaled-up TA on debt management.

17 Thank you!

18 Africa s rising debt Session 1. Debt dynamics in Africa s complex financing landscape 14:00 15:30