Developing countries facing a debt crunch

By Eyob Woldehana

High interest rates, growing investor risk aversion and borrowing that ballooned in recent years have left a range of developing economies mired in debt crises. Helping them claw out of this will be a key agenda item at the annual IMF and World Bank meetings in Morocco’s tourist hub of Marrakech which kicks off next week.

Below is a look at countries facing debt troubles, listed in alphabetical order.

North Africa’s largest economy needs to repay some $100 billion of hard-currency debt over the next five years. Cairo currently spends over 40 percent of revenues on interest payments; financing needs for fiscal 2023/204 stand at $24 billion.

Egypt has a $3 billion IMF programme and has devalued the pound by roughly 50 percent since February 2022. But a $2 billion privatisation plan has been slow, and it has delayed the removal of electricity subsidies.

Elections, scheduled for December, lower the chances of painful reforms, analysts said, and support from wealthy Gulf nations is key to ensuring financing needs are met.

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