The Managing Director of the International Monetary Fund, Kristalina Georgieva, is worried over Africa’s escalating debt, she said in Berlin, Germany, on Tuesday.
Kristalina Georgieva said about 40 percent of African countries are at debt distressed levels.
“In some cases we are concerned, in others we see that investing is going to pay off over time,” Georgieva said in an interview with Bloomberg TV from Berlin.
As per Bloomberg – African governments have rapidly increased their debt levels since 2009. In Zambia, government debt, including publicly-guaranteed obligations, is set to increase to 92% of GDP this year, and 96% in 2020, according to the IMF.
- Debt levels in the region have been rising as governments struggle to collect and grow revenue while increasing their budgets. South Africa’s ratio is projected to reach 81% of gross domestic product by 2028 and Kenya recently doubled its debt ceiling to match the size of the entire economy.
“We do advise Kenya to be somewhat more cautious in building debt, but we have seen good macroeconomic policies in Kenya,” she said. “Our program with the country, our engagement with the country, by and large, are just as positive.”
The IMF boss quickly emphasized that debt on its own was not bad..but, but “it is bad when it goes for the wrong things, and when it goes with a speed that the economy cannot handle”.
“In cases where debt is dangerous — take Zambia — we do say, you need to really get a handle on your debt. In other cases, like Ethiopia, we say you do need to renegotiate some of your debt,” she added as per Bloomberg.
