38 Middle East & Africa The EconomistFebruary 6th 2021
2 hard to get out of these holes. It will be es-
pecially difficult in countries that have
more dollar-denominated debt to pay back
than they have dollar reserves. In January
Moody’s, a credit-rating agency, highlight-
ed the risks faced this year by Zambia, Gha-
na and Ethiopia, in particular. The latter
two were among the world’s fastest-grow-
ing economies over the past five years. Yet
all three face trouble paying their foreign
bills—in Ethiopia’s case, aggravated by war.
The picture for the two biggest econo-
mies is slightly different. Nigeria’s debts
are relatively low, but an acute lack of for-
eign currency—and a graft-ridden regime
of multiple official exchange rates—is
pushing inflation up and risks provoking a
balance-of-payments crisis.
In South Africa most government debt
is owed in rand to local borrowers. But debt
service is nevertheless swallowing an ever-
larger share of government revenues: 40%
by the end of the decade, according to the
country’s treasury.
Talk of debt crises in Africa can provoke
a sense of déjà vu. Two decades ago 30 Afri-
can countries had big chunks of their
sovereign debt forgiven. This time around,
things are more complicated. They owe
large sums to commercial creditors
(roughly 43% of all government debt) and
to China’s government (16%), not just to
rich governments and multilateral lenders.
The rest of the world is offering support.
Last year the imfprovided $16bn in loans,
mostly with few strings attached, to help
African countries respond to the pandemic
and prevent liquidity crises. The World
Bank disbursed another $10bn. But most
countries will soon exhaust their emergen-
cy allocations. And the Washington-based
lenders’ pockets are not bottomless.
The g20, a group of the world’s largest
economies, has helped poor countries put
off debt repayments until July. Yet this is
just “kicking the can down the road”, says
Mr Zeufack. This is the year, says Mr Ofori-
Atta, to “sit down with the West and China
for a much more comprehensive debt-
restructuring and debt-cancellation pro-gramme.” To pretend otherwise, given the
numbers, he adds, “is to be disingenuous
with ourselves”.
The reality, though, is fiendishly diffi-
cult. Unlike in the 2000s, getting all the in-
terested parties in the same room would re-
quire a huge table, or at least a premium
Zoom subscription. They need to trust that
if one creditor grants debt relief, the debtor
will not use that money to pay off another.
African governments worry that if their
private debt is restructured, rating agen-
cies will downgrade them, making it hard-
er for them to borrow in the future.
Finance ministers may put off asking
for help, hoping for a miracle. If so, that will
prolong the pain. Around the middle of the
decade a wall of commercial-debt repay-
ments looms.
Africa’s fiscal woes could cause long-
term harm. When revenues are tight “the
first thing to go is the development bud-
get,” says Benno Ndulu, a former governor
of Tanzania’s central bank. More than half
of African countries cut capital spending
last year—a big worry when roads are dire,
ports are bottlenecks and more than half of
Africans still do not have electricity.
The damage caused by the widespread
closure of schools may be even worse. This
can be glimpsed in Korogocho, a slum in
Nairobi. Outside 13-year-old Grace Emi-
loyo’s house, the peak of a dump site towers
over residents. Every morning, instead of
going to school as she did before the pan-
demic, Ms Emiloyo wakes up, prays, then
braves her way through the stench and
men’s catcalls to the dump’s summit where
she collects plastics and metals to sell.
Last year Kenya closed classrooms for
nine months. Ms Emiloyo and her ten-
year-old brother, Nurdeen Tawfiq, are
among the 40% of students in Korogocho
who have not gone back to their books. Ms
Emiloyo’s mother, Maureen Kasandi, pre-
viously made a living going door-to-door to
clean people’s houses. But during the pan-
demic many families opted for live-in
housekeepers for fear of infection. Nobody
could take care of Ms Kasandi’s children if
she went away to work, so she has sent the
older ones out to make money.
When children drop out of school to
work, it helps families put ugali(a starchy
staple) on the table in the short term. But it
blights those children’s future prospects.
Without education, they will struggle to es-
cape from a life of drudgery.
Similar stories are playing out else-
where across the continent. Almost all of
Africa’s 253m pupils live in countries that
at some point closed schools. About seven
months of closures could cost African chil-
dren $500bn in lifetime earnings, warns
the World Bank.
The effects could last more than a gen-
eration. Most of the dropouts will be girls,
since many families favour sons when theycan afford to send only some of their chil-
dren to school. The girls who drop out will
not only earn less but are also likely to start
having babies sooner, and to have more of
them. In Kilifi County, on Kenya’s coast,
only 388 schoolgirls out of the 946 who got
pregnant during the closure last year have
reported back to school, according to Terre
des Hommes, a charity.
The link between female education and
family size is strong everywhere. Women
with no formal schooling tend to have
about six children, whereas those with sec-
ondary education have roughly two. This
matters because better-educated mothers
tend to lavish education on their smaller
broods. Before covid-19 hit, Africa was in
the middle of a demographic transition.
Girls were going to school for longer. Wolf-
gang Lutz of the Wittgenstein Centre for
Demography and Global Human Capital in
Vienna predicted that this would soon
translate into smaller families. That be-
nign shift is at risk if the pandemic disrupts
too many young girls’ schooling.
So the stakes are high. By damaging
their health, wealth and education, co-
vid-19 endangers the future of Africa’s larg-
est-ever generation. On the plus side, vac-
cine roll-outs may accelerate once rich
nations have inoculated most of their peo-
ple. Commodity prices may rise again as
the global economy recovers. Investors’ ap-
petite for risk may be big enough to enable
African governments to keep borrowing.
But the weight of evidence points to-
wards further waves of the virus hitting be-
leaguered health systems, adding to an
economic “long covid” across Africa.
Though some economies are well placed to
rally as the pandemic fades, more of them,
including the biggest, will struggle to re-
cover. Africans have shown remarkable re-
silience in response to the virus. But the
toughest years are yet to come.^7Light in the lockdownWhere credit is due
Sub-Saharan Africa, external government debt
$bnSources:WorldBank;DavidMihalyi*Bonds, commercial
banks and others4003002001000
2009 2019private creditors*Owed to:multilateral creditorsChina bilateral creditorsOthers