confidentially speaking
The Africa Confidential Blog
Let's not talk about debt
Blue Lines
Public debt is spiralling and the International Monetary Fund is
back in business in Africa.
That figures. But it's not a straight rerun of the testy relationship
of the 1980s and 1990s.
Now, countries such as Ghana
and Zambia are
lower-middle-income
countries. That means no more cheap money from the Fund or the World
Bank. But their imprimatur is essential for a government to issue bonds.
Ghana's government inherited a debt nightmare from its
predecessor but is ploughing an independent course. It has already
raised US$2.5 billion in bonds to help restructure its debt
commitments. It's also talking to Germany
and China about longer-term
financing deals but is in no hurry to negotiate a new deal with the IMF.
Zambia, in contrast, faces an increasingly threatening debt
mountain, after reports of reckless state procurement. Although the
government is negotiating a $1.3 bn. loan from the IMF, it adopts a
tough rhetorical position. Last week, the IMF told Zambia that it would
have to get Beijing to give a state guarantee to a loan offered by a
private Chinese company. No one in Lusaka wanted to talk about that.
Similarly, no one in President Koroma's
government in Freetown wanted
to talk about the IMF's decision to stop disbursements to Sierra Leone
after a free-spending and electioneering budget. Or some, like the
Kenyan government, simply
insist there is no problem with its IMF
programme, some six months after Fund has stopped disbursements.
