Africa’s Rising External Debt, Part 1: A Tempest in a Teapot

January 2019

The growth of government debt in Africa has accelerated in recent years, giving it renewed prominence in the debate amongst investors, international organizations, and policymakers. A major point of contention among the investor community is whether African countries risk falling into the same problems that they faced in the late 1990s-early 2000s and if another round of debt restructuring will consequently be needed.

In this new white paper, PGIM Fixed Income’s Giancarlo Perasso, Lead Economist CEEMA, Global Macroeconomic Research, and Elizabeth Doppelt, Analyst, Global Macroeconomic Research, analyze the external debt situation and outlook for Africa and conclude that market chatter has prematurely sounded the alarm on a potential debt restructuring, and African countries have a viable path forward for bolstering their debt-servicing capacities through expanded tax bases.




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