Debt risks growing

The risk of further sovereign defaults has risen across the region this month. Rwanda has joined Zambia in seeking to restructure its sovereign debt. And the collapse in oil prices will put more pressure on already fragile external and fiscal positions in the region’s energy producers. Angola looks most vulnerable, but dollar bonds are trading in or near distressed territory in Ghana and Nigeria too. All three countries are receiving some form of IMF financing. But debt relief may still be needed. Plans for this are at least now taking shape. The G20 agreed to a moratorium on bilateral payments by low-income economies and there is growing talk about private sector involvement too.