Total public debt in 2022. Government spending

Help local teams identify government spending priorities in the countries with better public sector prospects

MNCs selling to the public sector should ensure that their local partners can position their offerings as long-term cost-saving solutions for governments facing fiscal pressure. Firms can also consider extending flexible payment terms to local partners experiencing payment delays from public sector clients in these markets. Meanwhile, in countries with a more positive public sector outlook, such as Congo (DRC), firms should incentivize local teams to identify government spending priorities to help capture rising demand. Also, stay alert to tax hikes in 2022 and assess the potential impact on your costs and your customers’ purchasing power. Lastly, monitor sentiment around any subsidy cuts that may (as a downside scenario) trigger disruptive protests.


Unexpectedly high public spending needs have caused a deterioration of public finances in SSA during the pandemic. During 2021, there was an uptick in IMF engagement with SSA countries, even discounting the pandemic-related emergency support. Nine SSA countries have IMF-funded economic reform programs—eight of them approved or extended last year.

The high-profile sovereign default by Zambia in late 2020—and subsequent preliminary IMF deal that has already prompted cuts to fuel and farm subsidies—illustrates the risks posed by fragile public finances in SS

Our View

No more SSA countries are expected to face a debt default, following Zambia’s failure to service eurobond obligations since late 2020. However, several countries under tight fiscal pressures—such as Angola, Ghana, and Kenya—will face protracted curtailments of government spending through the mid-2020s, as they make painstaking efforts to rehabilitate their public finances in line with IMF-approved fiscal consolidation measures. Furthermore, these economies are under pressure to increase revenues through tax hikes in 2022. Nonetheless, there are exceptions to this trend: Congo (DRC)’s upbeat mining output—amid copper’s global price surge—and low public debt burden support a robust government spending growth outlook. Moreover, countries such as Côte d’Ivoire and Cameroon face considerably lower fiscal pressures than other west African markets, such as Ghana, and will see government demand recover faster through the mid-2020s.

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