SSA Debt Profile: 2019 Review and 2020 Outlook


Friday, January 31, 2020 / 3:00 PM / United Capital Research / Header Image Credit: BMI


The fiscal narratives across Sub Saharan Africa (SSA) region in 2019 was broadly similar, as fiscal deficit widened, owing to shortfalls in actual revenue generation amid rising expenditures. Thus, to cater for the rising recurrent spending and spur economic activities, public debt levels stayed elevated in 2019. More countries continued to tap into the international debt capital market without necessarily neglecting funds from traditional concessional sources. Notably, Benin was the "new kid on the block" as the West African country issued its debut sovereign Eurobond in H1-19 while the DRC received its first IMF lending since 2012, in H2-19.


In 2020, the borrowing spree is expected to pick as we anticipate a wider fiscal deficit - spurred by continued rise in overall expenditures during the period. Specifically, we expect the implementation of an upward review of national minimum wage to add further pressure on Nigeria and Ghana's government financing needs. Also, we expect the currently low interest rates environment in the developed market to spur commercial borrowings by SSA countries. However, the increased magnitude of market-based borrowings has a higher risk content, as captured by greater vulnerability to commodity prices, global interest rates, and currency movements.


Accordingly, to make these external borrowings sustainable, we expect government to implement policies and reforms that could build resilience to these risks and use foreign capital to raise medium-term potential growth.


Top African Stories

  • Kenyan central bank makes second cut to key lending rate: Kenya's central bank cut its benchmark lending rate on Monday for the second time in a row, saying the economy was operating below potential and there was room for a more accommodative monetary policy. Read More
  • W. Africa Crude-Nigerian offer levels underpinned by Libya outage: Buyers remained on the sidelines on Wednesday as sellers kept offer levels high on the back of the ongoing shutdown of most of Libya's production. Read More
  • Telecom Egypt's shares open up 10% following Saudi Telecom bid for Vodafone Egypt stake: Telecom Egypt shares rose by 10% in early trading on Thursday, rising for a third consecutive day following a bid by Saudi Telecom Co (STC) , the kingdom's biggest telecom operator, to buy a 55% stake in Vodafone Egypt. Read More
  • S.Africa's volatile rand weakens as investors weigh China virus damage: South Africa's rand weakened on Wednesday, reversing gains from the previous session in another day of volatile trading as concerns over the impact of the coronavirus on Chinese growth kept investors looking for short gains. Read More
  • Climate change linked to African locust invasion: Climate change may be powering the swarms of desert locusts that have invaded eastern Africa, ravaging crops, decimating pasture and deepening a hunger crisis, locust and climate experts said. Read more
  • Moroccan banks to refinance SMEs at 1.25% interest rate -central bank: Moroccan banks will refinance small and medium sized enterprises (SMEs) at 1.25% preferential interest rate as part of a plan to ease access to loans, Morocco's state news agency said on Monday, citing the central bank governor Abdellatif Jouahri. Read more  


Looking Forward


Jan-20 CPI YoY - February  9th



Dec-19  Gross Reserves - February 4th

Jan– 20 CPI YoY - February 12th



Dec-19 Overseas Remittances YoY - February 10th-17th

Jan-19 Inflation Rate - January 31st  



Q4-19 unemployment rate - February 7th



Jan-20 Markit/Stanbic IBTC Bank PMI  - Feb. 5th


South Africa

Jan-20 Gross Reserves - February 7th

Q4-19 South Africa Unemployment - Feb. 11th  


Visit African Markets in Proshare MARKETS

 Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.


 Proshare Nigeria Pvt. Ltd.


Related News

1.       Federal Reserve Issues FOMC Statement - Dec 2019

2.      Nigeria and South Africa: A Reason to Worry?

3.      Global Banks Start to Embrace ESG In Their Risk Management

4.      No More Half-Measures on Corporate Taxes - Confronting a Broken System

5.      Escaping Japanification Difficult for Eurozone If It Takes Root

6.      Monetary Policy Decisions: Four SSA Countries At The Center-Stage

7.      Aramco IPO Funds May Help Offset Fresh Saudi Austerity Push

8.     Central Bank Accountability, Independence, and Transparency

9.      South Africa's Rate Decision: Giving Priority To Foreign Investors

10.  Four Collision Courses for the Global Economy - Nouriel Roubini

11.   For Venezuela's Neighbors, Mass Migration Brings Economic Costs and Benefits

12.  Election Pledges Heighten UK Fiscal Risks

13.  A Look into Ghana's 2020 Budget Numbers

14.  October 2019 Macroeconomic Update - Comercio Partners

15.  Moody's Rating: Life-Saver to South Africa's Economy?

16.  The United States, Japan, and The Global Economy

17.   Mid-Term Budget Policy Statement: Should South Africa Be Worried?

18.  Argentina Crisis Adds to Neighboring Economies' Headwinds

19.  Slowing Growth and Interest Rate Cuts in Frontier Economies

20. Nigeria - South Africa New Trade Deal: Anything to Cheer?


 Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Related News