African countries that have defaulted on debt repayment
These problems have presented governments on the continent with stark choices needed in funding their economy. As a result, nearly half of Africa’s countries face difficulties making their debt repayments according to figures compiled by the World Bank and International Monetary Fund.
As the countries grapple with the burden of rising debt, their creditworthiness plummets, making it increasingly challenging to secure loans from organisations like the International Monetary Fund (IMF), and World Bank that have been key players in global finance, offering monetary assistance to governments suffering economic difficulties.
Below are the African countries that have defaulted on debt repayment:
1. Zambia
In 2020, Zambia opted to bow out of a $42.5 million eurobond repayment, becoming the first African nation to default on its debt in the Covid-19 era.
The copper-rich country had been facing mounting debt challenges for several years, exacerbated by a combination of factors, including a decline in commodity prices, economic mismanagement, and the impacts of the global health crisis.
Zambia’s default triggered concerns about the country’s fiscal sustainability, raised questions about its ability to meet future debt obligations, and prompted discussions about the need for debt restructuring.
The country recently reached an agreement in principle with a bondholder group in late October, securing a restructuring deal with official creditors. China also recently urged Zambia’s additional creditors to bear a “fair burden” in the nation’s debt restructuring efforts.
