Souleymane Muluku (former IFC) reveals the 5 major risks of 'borrowing in foreign currency'

Traoré Souleymane Muluku, former official of the International Finance Corporation (IFC) and board member of GT Bank, outlines five major risks for African states that borrow in foreign currencies. Exchange rate risk can cause debt to balloon in local currency, as illustrated by a $1 billion debt rising from 600 to 700 billion FCFA. He denounces loss of monetary and fiscal sovereignty, vulnerability to external shocks (US rate hikes or commodity price drops), and crowding out of the private sector. He cites Zambia's 2020 and Ghana's 2022 defaults as examples of these risks.