The IMF urged African and other emerging economies to develop their domestic financial markets to reduce their reliance on volatile external borrowing.
The IMF’s April 2025 Global Financial Stability Report highlights that high real interest rates worldwide have led to increased costs and reduced accessibility of external financing, particularly for frontier markets in Africa.
The report identified Tunisia as one of several African countries facing elevated sovereign debt vulnerabilities, along with Ghana, Zambia, Ethiopia, Kenya, Nigeria, Egypt, and Angola.
The IMF highlighted that, as global interest rates remain high and geopolitical tensions persist, real financing costs in emerging and frontier markets, including many in Africa, are at their highest levels in over a decade. This has led to strained public finances and an increased risk of sovereign debt distress.
The report also noted that capital flows to African economies remain volatile, with investor sentiment being sensitive to global risk conditions.
Countries with high external debt and limited fiscal space are particularly exposed to refinancing shocks, which can have severe economic consequences.
The Fund recommends that African states implement reforms to improve market infrastructure, legal frameworks, and investor protections, which are essential to attract long-term domestic investment and deepen financial intermediation.
TunisianMonitorOnline (NejiMed)
