Africa’s sovereign debt: an interview with Gregory Smith

18 min read 30 Nov 20

Summary: In this 15-minute interview I ask M&G’s Greg Smith, an emerging market debt strategist with a speciality in Africa and formerly a World Bank economist in Zambia, how the continent is coping with the Covid-19 pandemic. We also discuss how worried we should be about the negative headlines coming out of the region over Zambia’s recent default on its international bonds.  Is this the start of a wider trend in African defaults? And how is Chinese state power manifesting itself in lending and recoveries in the region?

We didn’t get the chance to discuss it in the video, but afterwards Greg talked of his sadness that Ethiopia is once again at war. A year ago Ethiopia’s Prime Minister won the Nobel Peace Prize for ending Ethiopia’s war with Eritrea. Today the region of Tigray appears to be the centre of some significant military activity, and there are fears for the 500,000 citizens in its capital.

We also discussed the sad fact that Africa usually appears in the news only when bad things happen – debt default, famine or unrest. In the video, Greg points out that emerging market defaults have been lower in Africa than elsewhere to date, and that actually Africa’s Covid experience has in many ways been less severe than that of many other regions – probably because of the much lower average age of populations.

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