The loan drought hits Africa
Even the good African risks may reschedule as bankers hold off.
As they talked in Nairobi in the second week of May, African bankers and finance ministers attending the African Development Bank meeting faced a major problem: the drying up of Euromarket lending to Africa. For many African countries, Eurocurrency loans had become an important means of funding current account deficits.
The source is dwindling. Syndicated loans to African borrowers totalled $5 billion in 1982, a drop of $2 billion from the year before. Euromarket borrowing declined more drastically in the first quarter of 1983, with the signing of only 17 loans worth $609 million.
At a time when the syndicated loan market has been contracting worldwide, Eurobankers have needed little prompting to close their doors on African borrowers, many of which rank among the world's least solvent countries. Eleven of them have recently rescheduled foreign debt or are in the process of doing so: Central African Republic, Liberia, Madagascar, Malawi, Sierra Leone, Senegal, Sudan, Togo, Uganda, Zaire and Zambia.
Three of Africa's biggest borrowers are possible candidates for rescheduling this year: Nigeria, Morocco and Ivory Coast, which together owe $35 billion. Other candidates include Kenya, Tanzania, Mozambique and Ghana.