East Africa crowds out businesses as debt costs bite

Debt

East Africa is edging toward a debt trap as rising commercial borrowing and debt servicing squeeze public spending and crowd out private investment.

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East African economies are edging towards a debt trap, driven by growing reliance on expensive commercial borrowing, including bank loans and Eurobonds, a new report warns.

The report by UK-based Gatsby Africa says rising debt service costs over the past 15 years are increasingly constraining the region’s ability to finance development.