Outlook for sovereign debt in sub-Saharan Africa.
Nigerian Finance Minister Kemi Adeosun on January 31 announced that the government is in "exploratory talks" with the World Bank to borrow 2.5 billion dollars. Squeezed by low commodity revenues, sub-Saharan African states (SSA) are struggling to manage their external debt, which has grown by 90% to 46.5 billion dollars overall during 2010-14, much of it from commercial sources.
South Africa will dominate SSA municipal bond issuance since most states lack adequate subnational financial management.
Donors may use the new loans to Angola and Nigeria as leverage for sharper currency depreciation.
Yet this would pressure central banks, which will likely raise interest rates to support thier currency and mitigate inflation.
Despite falling copper revenues, Zambia will likely delay seeking IMF assistance since reform conditions will prove politically toxic.
