As U.S. President-elect Joe Biden starts to formulate his foreign policies, the list of regions and issues needing immediate attention is already long. But one that should stand out is Africa’s debt. Tipped into crisis territory by the economic knock-on effects of the COVID-19 pandemic, it threatens to push the region further into China’s hands.
Even before the pandemic hit, many African countries had enormous debt burdens, which grew heavier this spring when the value of their currencies fell relative to the foreign currencies in which the debt was denominated. At the same time, the income necessary to make regular interest payments on the debt dried up. Commodity-dependent African economies like Angola and Nigeria rely on oil; demand had already been slumping since 2015, and the sectors were hit again this year as global demand plummeted because of the COVID-driven economic downturn. Those more service-oriented African countries not dependent on commodities fared no better, since tourism and foreign remittances cratered as well.
