In just over a week’s time, the Spring Meetings of the World Bank and IMF will see the first formal session for a Global Sovereign Debt Roundtable.
The problem of debt, and debt sustainability, has become one of the most urgent issues facing many low and middle-income countries around the world. The IMF estimates currently 36 low-income countries are at high risk of, or are currently in, debt distress, with the highest proportion of these in the African continent.
Prior to the pandemic, many countries in Sub-Saharan Africa were already facing a high risk of debt distress. This has been compounded by the pandemic and the Russia-Ukraine war, as well as rising interest rates from the US Federal Reserve. Just days ago, the Fed again raised its benchmark interest rate another quarter of a percentage point to 5%. We’ve yet to see how this will ripple out, but it’s going to add even more pressure on indebted sovereign governments, their ability to service their existing debts, and their prospects for financing an economic recovery.
So how did we get here, and more importantly, what can be done about it? What does an insolvency crisis look like for different countries today, and how will it impact vulnerable populations and other citizens?
In this episode, we'll explore the challenges facing borrowing countries right now in managing their debt, and we’ll look at potential solutions, and the role different groups, including bilateral creditors, Multilateral Development Banks (MDBs), and the private sector, can play.
Speakers
Related resources
· Where Credit is Due: How Africa's Debt Can Be a Benefit, Not a Burden (book)
· Old wine in new bottles? China, the G7 and the new infrastructure geopolitics (blog)
· China’s lending landscape and approach to debt relief (briefing note)
· Rising interest rates are threatening debt sustainability in Africa (blog)
· Providing climate finance in the context of a looming debt crisis (blog)