Decade after debt relief, Africa’s rush to borrow stirs concern

Wednesday, March 19, 2014

NEARLY a decade after Nelson Mandela and anti-poverty activists Bono and Bob Geldof persuaded the rich world to forgive Africa’s crushing debts, many countries’ debt levels are creeping up again, which could undermine the region’s growth boom.

As African states line up to join the growing club of dollar bond issuers, economists and analysts warn of a slide back into indebtedness that could undo recent economic gains and create a “Eurobond curse” to match the distorting “resource curse”.

“Eurobonds have become like stock exchanges, private jets and presidential palaces. Every African leader wants to have one,” said one investor, asking not to be named.

Source: Business Day (link opens in a new window)

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Impact Assessment
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governance, lending, social development