<\/p>\n
The Iran war is raising borrowing costs for African countries that are only just recovering from the post-pandemic shock that sent debt burdens soaring.<\/p>\n
Research published Tuesday by ONE Data showed borrowing costs from the World Bank\u2019s International Bank for Reconstruction and Development jumped to 5.2% in 2024 from 1.4% in 2020, as central banks lifted interest rates to quell surging inflation. Chinese lending rates for African countries rose to 5.7% from 2.5%.<\/p>\n
The report acknowledged it was premature to judge the impact of the Iran war, \u201cbut for countries already carrying heavy debt burdens the risk is clear: They face another round of economic shocks before they can recover from the last round,\u201d its authors wrote.<\/p>\n<\/p>\n
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The average cost of borrowing for African countries rose 91% between 2020 and 2024, the report said, squeezing investment in social developments.<\/p>\n
\u201cNow, with the Iran war threatening to increase energy and food prices significantly, the space countries have to weather this crisis is severely limited,\u201d said David McNair, executive director at ONE Data.<\/p>\n
While the conflict that began on Feb. 28 continues to cloud the regional outlook, signs that the US and Iran are still pursuing diplomacy offered some relief for emerging-market assets on Tuesday.<\/p>\n
Africa\u2019s sovereign spreads over US Treasuries, which peaked at 405 basis points at the end of March, had tapered to 352 basis points, according to JPMorgan Chase & Co. index.<\/p>\n
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News of a two-week ceasefire gave the Democratic Republic of Congo the opportunity to debut a $1.25 billion eurobond on April 10, while oil-producing Angola taped the market in March.<\/p>\n
Still, following steep cuts in Western aid budgets, the region can ill-afford the double hit from higher inflation amid surging fuel prices and the potential fallout from slower global growth.<\/p>\n
With higher borrowing costs, countries \u201cdon\u2019t just lose access to capital, they lose the ability to invest in their future,\u201d said William Asiko, senior vice president and head of the Africa Regional Office at the Rockefeller Foundation, which supported the research.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Iran #war #lifts #Africa #debt #costs #surged #pandemic<\/p>\n","protected":false},"excerpt":{"rendered":"
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