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Zambia’s external financing picture will continue to deteriorate in 2020. Sharply lower commodity prices will be a drag on the current account. At the same time, external debt repayments are set to increase markedly. As a result, already low foreign reserves are likely to fall even further. Additional external support of $0.5-1.0 bn would likely stabilize reserves.

With pandemic response a key driver, global debt is set to hit $325 trillion by 2025—up sharply from $255 trillion in 2019; U.S. general government debt is on track to exceed 120% of GDP this year, up from 102% in 2019; China’s total debt hit 317% of GDP in Q1 2020, up from 300% in Q4 2019—the largest quarterly increase on record; China is now the world’s largest bilateral lender to G20 DSSI-countries, holding some 25% of their external debt  

Pressure on SSA assets has intensified due to COVID-19 related shocks. In this note, we analyze the composition of external flows to the region. SSA has become more globally integrated and reliant on portfolio flows. This makes the region more exposed to swings in investor sentiment.

Lebanese authorities have developed a five-year comprehensive reform program, which could be supported by the IMF’s Extended Fund Facility. If implemented effectively we expect the macroeconomic situation to stabilize and an orderly debt restructuring, though significant challenges remain. 
 

In this special quarterly supplement to the Global Debt Monitor, we look at the impact of COVID-19 on sustainable debt markets (bond and loans), with comprehensive coverage of more than 150 countries across all sectors. 

DSSI-eligible sovereigns owe nearly $13bn in debt service payments to external private creditors from May 1st to end-2020; However, only 26 of the 73 DSSI-eligible sovereigns have outstanding Eurobonds, comprising a total stock of some $70bn; Eurobond debt service through the end of this year amounts to $4.9bn, of which interest payments represent $3.7bn

COVID-19 presents a challenge to BoPs in the Sub-Saharan Africa region. Lower commodity prices will sharply reduce exports in many countries. Dependence on tourism and remittances will also have a negative effect. C/A deficit financing is going to be challenging due to risk-off sentiment. Multilateral funding can cover some gaps, but solvency is an issue as well.