IMF managing director Christine Lagarde speaking in the concluding
roundtable at the Africa Rising Conference on May 30, 2014 at the
Chiasson Conference Center in Maputo, Mozambique. AFP PHOTO/IMF/STEPHEN
JAFFE
By Bloomberg News
In Summary
- Sovereign debt issuances in sub-Saharan countries may reach $6 billion this year.
Some African countries have issued too much debt
and possible added monetary stimulus in Europe that may boost demand
for emerging-market assets could further increase the burden, the
International Monetary Fund (IMF) said.
“There are some countries that have gone a bit
ahead of themselves, and that are rising the level of indebtedness to a
level which could be a concern,” IMF managing director Christine Lagarde
told reporters Friday in the Mozambican capital, Maputo, during an
conference hosted by the lender.
Sovereign debt issuances in sub-Saharan countries
may reach $6 billion this year, after a record $6.25 billion in sales in
2013, as the US cuts back on monetary stimulus that had driven bond
sales in developing nations, according to Fitch Ratings.
Kenya, East Africa’s biggest economy, and Ivory
Coast, Ghana and Senegal in West Africa are among nations planning to
sell $500 million to $1.5 billion of Eurobonds each in 2014.
Zambia has been the only African country so far
this year to tap international dollar-debt market, raising $1 billion in
April in an offer than was about four times oversubscribed.
European Central Bank President Mario Draghi said
on May 8 that the Governing Council was “comfortable” taking measures to
boost inflation in the euro area. The ECB’s next policy decision is due
on June 5.
“If not well communicated, if not well
anticipated, it would bring about a level of volatility which could be
detrimental,” Lagarde said. “It is a potential risk, but one that I hope
can be mitigated.”
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