The issuance of over USD18bn worth of US dollar denominated debt by Sub-Saharan African (SSA) states has raised concerns about the region’s rising level of indebtedness, but we believe that most of these fears are largely misplaced. Overall debt levels in most of SSA remain relatively low as a share of GDP and most governments are investing newly raised funds in growth-boosting infrastructure projects. Even so, issuing foreign-currency debt does involve risks. Weakening local currencies and a large pile of repayments due early next decade could cause problems for some states in the years to come.
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