Outsize debt has been a familiar problem in the developing world

Outsize debt has been a familiar problem in the developing world, but the current crisis is considered the worst yet because of the amounts owed as well as the huge increase in the number and type of foreign creditors. And in Africa, a continent pulsating with potential and peril, debt overshadows nearly everything that happens. It leaves less money for investments that could create jobs for what is the youngest, fastest-growing population on the planet; less money to manage potential pandemics like Covid or mpox; less money to feed, house and educate people; less money to combat the devastating effects of climate change, which threaten to make swaths of land uninhabitable and force people to migrate. If nothing is done to help countries manage the financial crunch, “a wave of destabilizing debt defaults will end up severely undermining progress on the green transition, with catastrophic implications for the entire world,” warned a new report from the Finance for Development Lab at the Paris School for Economics and Columbia University’s Initiative for Policy Dialogue. (The New York Times)