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February 2, 2021

Emerging markets in Africa buckle under mountains of debt

What's hurting Ethiopia, Chad and Zambia? Data from Angola may provide an answer.
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In-house blogger
Guest blogger
Michael Brisley
Head of UK Buy Side sales and EMEA New Business
All opinions expressed in this content are those of the contributor(s) and do not reflect the views of Macrobond Financial AB.
All written and electronic communication from Macrobond Financial AB is for information or marketing purposes and does not qualify as substantive research.

Ethiopia sought relief this week from a G20 initiative designed to help developing countries struggling with COVID. Chad also made the same request a week earlier, just as Zambia missed a second Eurobond coupon payment after defaulting on its debt in November – the first African nation to do so amid the pandemic.

What’s behind all this distress? Our chart comparing Angola’s trade balance and debt as a percentage of GDP offers some clues. As you can see, its debt has climbed steadily over the years as oil prices declined.

While crude isn’t the only culprit, can we expect the recent recovery in the oil market to halt the domino effect in Africa?

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