Credit risks for Sub-Saharan African sovereigns and banks rise; telecom sector a bright spot

Moody's Talks - Emerging Markets Decoded

Inside this episode

Elisa Parisi-Capone from the Sovereigns team and Peter Mushangwe from the Financial Institutions team join host Thaddeus Best to discuss how liquidity risks have risen for Sub-Saharan sovereigns with less-developed domestic capital markets, and the pandemic-induced asset quality deterioration of some of the largest regional banks. Also, Lisa Jaeger discusses one sector in the region experiencing growth: telecom companies.

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• Telecommunications – Africa African telecoms to benefit from strong growth but face increasing sovereign risks Growth of the telecom sector in Africa will be strong because most markets remain underpenetrated. But deteriorating sovereign environments increase risks.
• Banks - Africa Pandemic takes toll on Africa's largest banks but profitability will remain resilient Problem loans have soared at African banks as the pandemic brought widespread economic disruption to the continent.
• Sovereigns – Africa Varied availability of domestic funding sources in Africa drives liquidity risks Following a surge in gross borrowing requirements during the pandemic, sovereigns with domestic funding constraints face higher exposure to a potential tightening in financial conditions.