support economic recovery ( figure 1.16 ). Indeed , amid reduced fiscal space , the much-needed policy support will continue to put pressure on African countries ’ sovereign debt levels , which are projected to stabilize at around 70 percent of GDP in 2021 and 2022 ( figure 1.17 ).
Although the increase in debt is nearly universal , country groupings show notable differences . The overall sharp increase in 2020 — of nearly 10 percentage points — was driven by nonoil resource-intensive economies . These countries have contributed the most to the overall increase in debt , reaching more than 85.4 percent of GDP that year . They were followed by oil exporters ( 66.7 percent of GDP ) and non-resource-intensive countries ( 65.3 percent of GDP ). Debt levels in non-resource-intensive countries increased significantly , from 57.4 percent in 2019 to around 66.1 percent in 2021 and are expected to remain high in the near term . The average debt-to-GDP ratio in other resource-intensive countries is estimated to have declined to 75 percent in 2021 . This mainly reflects declines in São Tomé and Príncipe ( 20 percentage points ), Sudan ( 86 percentage points ), Zambia ( 17 percentage points ), and Zimbabwe ( 35.1 percentage points ) due to large increases in nominal GDP relative to nominal dollar-denominated public debt and due to lower debt service obligations in 2021 resulting from the Debt Service Suspension Initiative ( DSSI ). However , heightened exchange rate depreciation pressures , particularly in net importers of commodities , on the back of the Russia – Ukraine conflict could increase the cost of debt servicing in many African countries .
The international community provided muchneeded liquidity and temporary debt service relief during the pandemic , but this might not be enough to prevent countries from sliding into debt distress . Examples of liquidity support include the DSSI , launched in April 2020 and extended to December 2021 . The potential savings from the DSSI in all 38 eligible African countries are estimated at more than $ 13 billion ( figure 1.18 ), ranging from $ 4.5 million in Liberia to $ 2.9 billion in Angola . However , although the DSSI has alleviated significant immediate liquidity pressures on African economies , it remains shallow , with the potential savings from the moratorium representing only 24.5 percent of total debt service payments of African countries for 2020 and 40.1 percent for 2021 ( see figure 1.18 ). In addition , this debt service standstill represents only
FIGURE 1.16 Additional resources needed to finance fiscal deficits in Africa , 2020 – 22
Percent of GDP 15
Percent of GDP $ billions 500
Nominal value
12 400
9 300
6 200
3 100
0 0
2020 2021 2022 2020 – 22
2020 2021
2022 2020 – 22 Note : The financing needs are computed as the monetary value necessary to cover the projected fiscal deficits in a country . Due to data constraints for 2021 and 2022 , the computation did not factor in all the short-term debt , interest , and amortizations . In addition , it was assumed that African countries were unable to close the financing gap for 2020 and 2021 , which therefore adds up to the overall financing needs for 2020 – 22 . Source : Staff calculations .
28 AFRICA ’ s economic performance and outlook