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👇🏾4 news of the week! 🇿🇼 Zimbabwe – China Cancels Zimbabwe Debt Amid Crisis   China has canceled an unspecified amount of interest-free loans to Zimbabwe and is assisting the country in managing its debt crisis. Zimbabwe owes billions to China, primarily for upgrading airports and power plants. As of September 2023, Zimbabwe's total state-backed debt was $17.7 billion, heavily influenced by Chinese loans. Critics accuse China of predatory lending to expand its political influence, which China denies, asserting a policy of non-interference.  _   🏦 IMF & WB - Urging IMF, World Bank to Aid Africa's Economy   At the annual IMF and World Bank spring meetings in Washington, there's a growing call to address the global economic recovery's disparity, with Africa at risk of lagging behind. Amid inflation and geopolitical tensions escalating energy costs, there's a push for a financial architecture more favorable to Africa, emphasizing the need for reform to support the developing world's recovery post-pandemic. _ 🇬🇭 Ghana – British Museums Return Looted Asante Artifacts to Ghana   Two British museums have returned 32 looted artifacts to Ghana, including gold and silver items from the Asante kingdom, taken over 150 years ago. These items are on a six-year loan and will be displayed at Kumasi's Manhyia Palace Museum during the Asante king's silver jubilee. This significant cultural restoration marks a key moment in reclaiming and celebrating Ghana's rich heritage and history.  _ 🇹🇬 Togo – New Parliamentary Constitution Adopted   Togo's parliament has unanimously adopted a new Constitution, shifting from a presidential to a parliamentary system, and abolishing direct presidential elections. The newly created 'President of the Council of Ministers,' holding substantial power as the head of the majority party, signifies a significant governance shift. This move is viewed by the opposition as an attempt to maintain President Faure Gnassingbé's hold on power.

🚨 Our new NAI policy brief "The Debt Trap Dilemma of African Governments" is out! What’s new? With debts increasing by more than 180 percent over the past decade, nearly half of Africa’s economies are on the brink of debt distress. Unlike previous debt crises, the current one is characterised by a shift from multilateral to commercial and bilateral creditors, notably China, and the proliferation of Eurobonds, aggravating debt conditions. In recent years, fragile post-Covid-19 macroeconomic conditions, the repercussions of Russia’s aggression in Ukraine and accelerating climate crisis have further strained the public finances of many African countries. Why is it important? At a time of elevated global food prices and volatile supply chains, unsustainable debt levels pose significant threats to food security in Africa, where most countries heavily depend on food imports and around 50 percent of household expenditure is allocated to food. Pressured by the heavy debt burden, there is a risk that governments divert funds from essential sectors, such as education and health care, and crucial social programmes, such as food assistance and nutrition initiatives. The interplay between debt, development and food security creates a vicious cycle, raising the risk of socio-political unrest. What should be done and by whom? On the debt side, African countries need to mobilise more domestic resources through eliminating tax exemptions and implementing digital filing and payment systems. On the food security side, they need to prioritise investments in agriculture to build the productive capacities of their food systems and enhance their resilience to deal with future shocks. It is also crucial to support vulnerable households facing food insecurity through international humanitarian aid and targeted assistance programs. Government interventions to strengthen social safety nets, provide direct food aid, nutritional support, and financial assistance can help alleviate immediate hunger and malnutrition among these households. Read more: https://lnkd.in/dyp6RWFp

The brief sheds light on the characteristics of the current debt wave, including the emergence of new players like China and the concentration of debt maturities in the coming years. Overall, the policy brief calls for proactive measures to address the debt trap dilemma and ensure sustainable development in Africa.

Ukraine’s national debt set to exceed 100% of GDP by 2025 as it expects more financial aid #bne #bneEditorsPicks #Ukraine #debt #RussiaUkraineWar Ukraine’s national debt is projected to exceed 100% of its GDP by 2025, according to a new forecast from the IMF. The IMF estimates that Ukraine's debt will reach 95.6% of GDP this year and rise to 106.6% by 2025. The debt level is expected to continue increasing slightly in 2026 before decreasing by five percentage points to 102.6% in 2027. The IMF attributes the rising debt to the ongoing war with Russia, which has put immense pressure on Ukraine's economy, as well as delays in financial assistance from international partners.

THERE ARE TWO WAYS TO CONQUER AND ENSLAVE A NATION: SWORD AND DEBT By JOACHIM BUWEMBO, Published on Monday June 17 2024, The East African Classic American parlance designates Death and Taxes as the only two certainties of life. Contemporary most African States have three certainties in 3 Ds: Debt, Dishonesty and (environmental) Degradation. Dishonesty, commonly called corruption, was previously disputed, with the government challenging critics to give evidence, but there is now consensus over its being endemic, with the Executive acknowledging its entrenchment in the Legislature and the Treasury. So it is no longer “unpatriotic” to say corruption in the Republic is alarming. Indeed, in his State Of the Nation Address last week, President Yoweri Museveni said evidence of corruption is now available. As for Debt, another American saying attributed to President John Adams goes: “There are two ways to conquer and enslave a nation — one is by sword, the other is by debt.” African debt is a statistical fact requiring no argument and now equals half of the State's GDP, claiming an unhealthy chunk of the government’s revenue to service it, thus limiting the capacity to deliver essential services. You don’t want to imagine what the situation will be in the foreseeable future, maybe sooner than later when the repayment for the principal debt sums on key major loans taken two decades ago comes due. The only solace is the fatalistic observation that some other African countries are in the same sinking boat. In deed, there is a linkage through the perpetuation of three certainties of Dishonesty, Debt and Degradation, but the solution also lies in linkage, not treatment in isolation. Debt and corruption go hand-in-hand. Refusing to do the work that one is contracted to do while getting paid is corruption, and that is what the experts in the Treasury indulge in daily. https://lnkd.in/d45aC4nt

Does national debt matter? United States The United States boasts both the world's biggest national debt in terms of dollar amount and its largest economy, which resolves to a debt-to GDP ratio of approximately 128.13%. The United States' government's spending exceeds its income most years, and the US has not had a budget surplus since 2001. Perhaps surprisingly, the countries to which the US is most in debt are Japan, which itself has significant debt, and China, which is often viewed as the United States' greatest economic competitor. China China’s national debt is currently over 10 trillion USD—however, because of China's massive economy, the country's debt is only 68.06% of its GDP. China's current debt level is a significant increase from 2014, when the national debt was 41.54% of the country's GDP. An International Monetary Fund report from 2015 stated that China’s debt was relatively low, and many economists have dismissed worries over the size of the debt both in its overall size and relative to China’s GDP. China currently has the world’s second-largest economy and the largest population, with approximately 1,425,821,667 people. Russia Russia’s debt ratio was one of the lowest in the world at 16.99% of its GDP in 2021—though the country's war with Ukraine, which began in early 2022, will likely have some effect on this ratio. Russia is usually one of the ten least-indebted countries in the world. Russia’s debt is currently at a total of just over 302 billion USD. Most of Russia’s external debt is private.

Bangladesh's national debt, when compared to other developing countries, reflects both challenges and a relatively stable economic environment. As of 2024, Bangladesh's external debt stands at approximately $95.5 billion, which accounts for around 30% of its GDP. This is a moderate level compared to many other developing nations, indicating that Bangladesh has managed its debt relatively well in relation to its economic size. Comparison with Other Developing Countries: India: India's national debt is significantly higher, both in absolute terms and as a percentage of GDP. India's debt exceeds $3 trillion, which is about 60% of its GDP. Despite having a large and diversified economy, India faces challenges due to its substantial debt load, especially in managing fiscal deficits and public spending. Sri Lanka: Sri Lanka is in a much more precarious situation with a debt-to-GDP ratio that has soared above 100%, leading to a severe economic crisis. The country has struggled with massive debt, compounded by poor governance and the impact of the COVID-19 pandemic, resulting in a default on its debt obligations in 2022. Pakistan: Pakistan's external debt is around $130 billion, constituting roughly 40% of its GDP. Pakistan faces ongoing challenges with its debt due to a combination of political instability, low economic growth, and reliance on external borrowing, leading to periodic crises. Vietnam: Vietnam's debt situation is more favorable, with public debt hovering around 39% of GDP. Vietnam has seen rapid economic growth and has managed its debt levels prudently, benefitting from strong export-driven growth and foreign investment. Malaysia: Malaysia's national debt is substantial, with external debt exceeding $269 billion, which is about 67% of its GDP. However, Malaysia has a strong economic base, with a diversified economy and significant reserves, allowing it to manage its debt effectively. In summary, while Bangladesh's debt levels are moderate and manageable, the country still needs to focus on sustainable economic growth and careful fiscal management to avoid the pitfalls seen in countries like Sri Lanka and Pakistan. However, compared to many of its peers, Bangladesh is in a relatively stable position, with a debt level that does not yet pose an immediate risk to its economy. Source: (Focus Economics)(Global Econ Data).

Global public debt to exceed $100 trillion this year — IMF "Countries where debt is not projected to stabilize account for more than half of global debt and about two-thirds of global GDP," the IMF noted WASHINGTON DC, October 15/ Total public debt of all countries is expected to exceed $100 trillion this year, which will amount to around 93% of global GDP, the International Monetary Fund (IMF) said in a report. "Global public debt is very high. It is expected to exceed $100 trillion (93% of global GDP) in 2024 and to keep rising through the end of the decade (approaching 100% of GDP by 2030). Although debt is projected to stabilize or decline in about two-thirds of countries, it will remain well above levels foreseen before the pandemic," the report said. "Countries where debt is not projected to stabilize account for more than half of global debt and about two-thirds of global GDP. There are good reasons to believe that future debt levels could be higher than currently projected. The political discourse on fiscal issues has increasingly tilted toward higher government spending in recent decades," the IMF noted. The Fund’s experts said in April that total public debt of all countries rose by around 2 percentage points in 2023 to 93.2% of global GDP, with the US and China having become the growth leaders as their debts added more than 2 and 6 percentage points of GDP, respectively. The IMF projected then that Russia’s public debt would grow to 20.8% of the country’s GDP in 2024 and to 24% in 2029. #business #finance #financialservices

A decades-long crisis is getting worse, and now dozens of nations are spending more on interest payments than on health care or education. 🤔 The Vatican’s meeting on the global debt crisis last week was not quite as celebrity-studded as the one that Pope John Paul II presided over 25 years ago, when he donned sunglasses given to him by Bono, U2’s lead singer. But the message that the current pope, Francis, delivered this time — to a roomful of bankers and economists instead of rock stars — was the same: The world’s poorest countries are being crushed by unmanageable debt and richer nations need to do more to help. Emerging nations are contending with a staggering $29 trillion in public debt. Fifteen countries are spending more on interest payments than they do on education, according to a new report from the United Nations Conference on Trade and Development; 46 spend more on debt payments than they do on health care. Unmanageable debts have been a recurring feature of the modern global economy, but the current wave may well be the worst so far. Overall, government debt worldwide is four times what it was in 2000. Government overspending or mismanagement is one cause, but global events out of most nations’ control have pushed their debt problems into overdrive. https://lnkd.in/d3h7vS26

The IMF has urged risk warnings telling about the fact that global public debt could be more acute than expected coupled with increased fiscal deficits in the United States and China. It claims that global public debt is expected to cross one hundred and $100 trillion by 2024 and will amount to one hundred percent of the combined gross world product by 2030. The U.S and China highly contribute to this debt augmentation. If left out, global debt would decrease by approximately 5% of its value, approximated by the IMF. IMF’s Vitor Gaspar pointed out that most projections are made that overstating and underestimating government debts. Unfortunately, governments today are constrained by a so-called ‘fiscal policy trilemma,’ the need to increase public expenditures for security and development, political constraints on raising taxes, and an inability to service debt. This is much more difficult for developing country, particularly those in sub-Saharan Africa because, in order to address poverty, they have to spend but are constrained by their narrow sources of financing and tax revenues. High debt causes sudden selling off of assets in case investors lose confidence in the country thereby increasing borrowed costs across the world. For instance, the United States has a $1.833 trillion deficit which avails budget fight while in China local government threaten fiscal health despite spending cuts recently.