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Sovereign debt management is becoming an onerous challenge for most sub-Saharan African countries. Some of these countries are at a high risk of debt distress, and are now calling the IMF for support programmes. For example, the IMF has reached a staff-level agreement of $3 billion with Ghana to partially solve its debt problems, and Kenya has secured the Fund’s $447mn disbursement, totaling $2.4bn. Meanwhile, Nigeria is facing both debt and revenue problems, with its debt-to-GDP ratio estimated at approx. 26% but below SSA average (56%). Could Nigeria be the next?

2023 – To be an odd year indeed

From a macroeconomic perspective, 2022 was more than an eventful year. Some say it’s a year that is better forgotten than remembered. The year 2023 on the other hand looks more promising for Nigeria but challenging for the global economy with a recession looming. Nigeria’s GDP is projected to slow to an average of 2.8% in 2023 from 3.2% in 2022 due to high logistics costs, exchange rate pressures, low oil production, and high debt service costs. That notwithstanding, interest rates are expected to stay elevated, whilst high inflation would moderate later in the year. In addition, forex scarcity will linger until a change in forex policy by the new administration. Meanwhile, fiscal imbalances and debt sustainability will remain focus areas of the new administration, especially as debt rescheduling discussions commence in Q4.

Food supply in a perfect storm – Africa’s broken food chain in hard times

The COVID-19 pandemic has exposed Africa’s food supply chain to existential shocks, and many countries in the continent are focusing on production rather than profit-based taxes to raise revenue. These often weigh on food sustainability on the continent. Today, one in every five households in Africa is facing food scarcity and more than 821 million Africans are hungry. Also, food importation is rising; famine has resulted in a few places while internal conflict and climate change have exacerbated the problem. Africa would need drastic policy reforms to solve its food crisis.

In this edition of the FDC monthly publication, food crisis and hunger, opportunities in energy crisis, and several other topical issues are discussed in detail.

Enjoy your reading!