Africa’s Debt Crisis Hampers Its Fight Against Covid-19
April 8, 2020
(The Economist) – ECONOMIC CRISIS and covid-19 are forcing hard choices on most of the world. But the dilemma facing indebted poor countries is particularly acute. They can either pay foreign creditors or allow more of their citizens to die, say experts. This dilemma is not new. In 2016 Angola spent nearly six times as much servicing its external debt as it did on public health care. Fifteen countries in sub-Saharan Africa spent more money paying creditors abroad than they did on doctors and clinics at home. But now, faced with a slump in revenues and skyrocketing borrowing costs as investors seek relative safety, many African governments are struggling to find the money to fight the pandemic and shore up their economies. Whereas rich countries are borrowing to spend about 8% of GDP on stimulus measures, African ones are spending just 0.8% of GDP.