S&P says Sub-Saharan Africa commercial borrowing to fall 20% to $37 billion

The 18 publicly rated sub-Saharan African (SSA) sovereigns will borrow an equivalent of $37 billion from long-term commercial sources in 2016, projects Standard & Poor’s Ratings Services in a report published this week.

This represents a 20 percent decrease in long-term commercial debt issuance compared with 2015.

“We expect that $23.6 billion (64%) of total commercial borrowing will be raised in local currency, the rest in foreign currency. Some 38%, or $14 billion, of the sovereigns’ gross borrowing will be to refinance maturing long-term debt (compared with an estimated $18 (39%) billion in 2015),” S & P said in the report.

“We expect total estimated net borrowing requirements of $23 billion in 2016.”

Consequently, the ratings agency projected that rated SSA sovereigns’ commercial debt stock will reach an equivalent of $300 billion by the end of 2016, and that the total commercial and concessional debt stock will reach about $403 billion, a year-on-year increase of $25.8 billion (or 6.8%).

“We expect that the outstanding short-term (under one-year) commercial debt stock will reach $53 billion at year-end 2016,” S & P said.