Zambia is seeking to delay $120 million in interest payments on its Eurobonds for six months — an effective default. Chad asked to postpone debt repayments to Glencore and other private creditors. Kenya said it is at risk of debt distress and Angola sought to calm anxious investors, with its secretary for finance insisting the country will honor its obligations.
Zambia, the first to approach the precipice, paid the price, with its securities falling to almost half their face value. The countries have something in common.
The coronavirus has slashed the price of the commodities they export — oil from Angola and copper from Zambia — and slowed economic activity. And they came into the crisis vulnerable. All had borrowed heavily, as have many African countries over the past decade, and were in a poor state to cope with an economic shock.
They aren’t alone. More than a third of African countries are either in debt distress or are approaching it, the International Monetary Fund said. Even economic stars like Ghana, which has boasted consistently impressive economic growth, borrowed heavily and now spends half of its revenue servicing debt.