From 2000, the Heavily Indebted Poor Countries (HIPC) initiative and Multilateral Debt Relief Initiative provided debt relief to 30 eligible African countries; however, several African HIPCs have rapidly accumulated new debt since then. Assessments between 2012 and 2015 produced mixed verdicts on the sustainability of new post-HIPC debt. But recent data reveals a clearer picture. While many have maintained debt sustainability, for a growing number, overall risks to debt distress have deteriorated in the past three years and prospects for reversing this trend are diminishing. Key policy actions, including greater fiscal effort and new debt management capacities, can help address this challenge for some. But for others, the case for a new debt relief initiative is growing.
Cyrus Rustomjee is a senior fellow with CIGI’s Global Economy Program, where he focuses on the blue economy. Currently a managing director at Cetaworld Ltd., an independent consulting practice, Rustomjee has also served in key positions at the International Monetary Fund (IMF), the Commonwealth of Nations, the G20 and the government of his native South Africa.