Not out of the woods

The recovery in global risk appetite and in commodity prices has eased strains in balance of payments across the region. But conditions remain much worse than the they were before the crisis flared up. And while many EM sovereigns have tapped global capital markets in recent weeks, the yields on most African dollar debt still look prohibitively expensive. Indeed, a growing number of countries are taking up bilateral debt relief initiatives. Given the extent of the fiscal hit, it seems likely that the current G20 initiative will need to be extended and/or private sector creditors will need to endure losses.