Overall government debt in sub-Saharan Africa stabilises but at high level – IMF - MyJoyOnline

The International Monetary Fund's latest assessment reveals a paradoxical situation across sub-Saharan Africa: while government debt levels have finally stopped accelerating, they remain dangerously elevated, presenting a complex risk-reward landscape for European investors seeking exposure to the continent's growth potential. The stabilisation itself represents a modest achievement. After years of relentless debt accumulation—particularly following the pandemic-era spending spree and subsequent commodity price volatility—African governments have managed to arrest the upward spiral. However, this stability masks a more troubling reality: debt-to-GDP ratios across the region remain at historically elevated levels that constrain fiscal flexibility and limit governments' capacity to invest in infrastructure, education, and healthcare. For European investors, this development carries significant implications. The stabilisation of debt creates a window of opportunity, but only for those positioned to navigate the underlying constraints. Many sub-Saharan governments now face a fiscal straitjacket. With significant portions of revenue dedicated to debt servicing, their ability to provide the policy support and infrastructure investment that would ordinarily attract foreign direct investment has dimmed considerably. The debt composition matters significantly. A substantial portion of sub-Saharan African debt is denominated in foreign currency, exposing borrowers to exchange rate volatility. Recent currency depreciation across the region has mechanically increased