High Africa Yields Raise Debt-Service Concern, AfDB Says
- Local-currency bonds help to avoid exchange-rate risks
- Weak exchange rate means using more funds to service debt
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Some African countries are overpaying for dollar bonds, raising concern about debt-service costs at a time when currencies are weakening against the greenback, according to the African Development Bank.
High interest rates make the continent’s bonds attractive to investors despite questions about the true extent of the debt loads of countries such as Zambia and the Republic of Congo.