{"id":60949,"date":"2025-10-16T20:27:11","date_gmt":"2025-10-16T20:27:11","guid":{"rendered":"https:\/\/www.africa-press.net\/mauritius\/all-news\/imf-warns-of-rising-debt-risks-in-sub-saharan-africa"},"modified":"2025-10-16T21:01:48","modified_gmt":"2025-10-16T21:01:48","slug":"imf-warns-of-rising-debt-risks-in-sub-saharan-africa","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/mauritius\/all-news\/imf-warns-of-rising-debt-risks-in-sub-saharan-africa","title":{"rendered":"IMF warns of rising debt risks in Sub-Saharan Africa"},"content":{"rendered":"

Africa-Press – Mauritius. <\/strong><\/span>Sub-Saharan African governments are increasingly turning to local banks to fund their budgets, paying higher borrowing costs at home than abroad and putting new pressure on domestic lenders, the International Monetary Fund (IMF) warned on Thursday.<\/b><\/p>\n

In its latest Regional Economic Outlook released during the IMF and World Bank annual meetings in Washington, the Fund said the \u201cdomestic cost of capital remains elevated across the region,\u201d adding that many local financial markets are \u201cunderdeveloped, fragmented, and illiquid,\u201d with high transaction costs and lending spreads.<\/p>\n

The IMF noted that new domestic borrowing is now \u201csignificantly more expensive than external borrowing\u201d in several countries. As governments rely more heavily on local banks, funding costs are rising and private-sector investment is being squeezed.<\/p>\n

The report highlighted that domestic banks\u2019 holdings of government debt are \u201clarge and growing faster in sub-Saharan Africa than in the rest of the world.\u201d This, it warned, risks creating a \u201cvicious feedback loop\u201d in which strained public finances undermine banks\u2019 stability, further tightening credit and worsening fiscal pressures.<\/p>\n

Abebe Aemro Selassie, director of the IMF\u2019s African Department, told Reuters that while the growing shift to local funding shows progress in countries\u2019 ability to borrow in their own currencies, it also carries significant risks.<\/p>\n

\u201cAbout half of total public debt is owed to domestic banks,\u201d Selassie said. \u201cAccess to external financing has not been readily available in recent years, but excessive domestic borrowing can also create problems in the banking sector if governments struggle to service their debt.\u201d<\/p>\n

After years of being locked out of global capital markets due to high borrowing costs and economic uncertainty, some African countries have cautiously started returning to international bond markets since 2024, but many remain wary of falling back into debt traps.<\/p>\n

For More News And Analysis About Mauritius<\/span> Follow Africa-Press<\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Mauritius. Sub-Saharan African governments are increasingly turning to local banks to fund their budgets, paying higher borrowing costs at home than abroad and putting new pressure on domestic lenders, the International Monetary Fund (IMF) warned on Thursday. In its latest Regional Economic Outlook released during the IMF and World Bank annual meetings in […]<\/p>\n","protected":false},"author":84,"featured_media":60948,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[2293,6898,389,241],"class_list":["post-60949","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africanews","tag-central-bank","tag-imf","tag-mauritius"],"yoast_head":"\nIMF warns of rising debt risks in Sub-Saharan Africa - Mauritius<\/title>\n<meta name=\"description\" content=\"Sub-Saharan African governments are increasingly turning to local banks to fund their budgets, paying higher borrowin ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/mauritius\/all-news\/imf-warns-of-rising-debt-risks-in-sub-saharan-africa\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"IMF warns of rising debt risks in Sub-Saharan Africa\" \/>\n<meta property=\"og:description\" content=\"Sub-Saharan African governments are increasingly turning to local banks to fund their budgets, paying higher borrowin ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/mauritius\/all-news\/imf-warns-of-rising-debt-risks-in-sub-saharan-africa\" \/>\n<meta property=\"og:site_name\" content=\"Mauritius\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2025-10-16T20:27:11+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-10-16T21:01:48+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/mauritius\/sites\/61\/2025\/10\/sm_1760635834.403665.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"538\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/mauritius\/all-news\/imf-warns-of-rising-debt-risks-in-sub-saharan-africa#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/mauritius\/all-news\/imf-warns-of-rising-debt-risks-in-sub-saharan-africa\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/mauritius\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"IMF warns of rising debt risks in Sub-Saharan Africa\",\"datePublished\":\"2025-10-16T20:27:11+00:00\",\"dateModified\":\"2025-10-16T21:01:48+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/mauritius\/all-news\/imf-warns-of-rising-debt-risks-in-sub-saharan-africa\"},\"wordCount\":310,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/mauritius\/all-news\/imf-warns-of-rising-debt-risks-in-sub-saharan-africa#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/mauritius\/sites\/61\/2025\/10\/sm_1760635834.403665.jpg\",\"keywords\":[\"Africanews\",\"central bank\",\"IMF\",\"Mauritius\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/mauritius\/all-news\/imf-warns-of-rising-debt-risks-in-sub-saharan-africa#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/mauritius\/all-news\/imf-warns-of-rising-debt-risks-in-sub-saharan-africa\",\"url\":\"https:\/\/www.africa-press.net\/mauritius\/all-news\/imf-warns-of-rising-debt-risks-in-sub-saharan-africa\",\"name\":\"IMF warns of rising debt risks in Sub-Saharan Africa - 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