DEBT REPORT -- 2022 EDITION I January 2022 Debt Report 2022 About the Report This is the first of three Debt Reports for 2022 to be published online over the course of the year to provide users with data and analysis on external and public debt of low- and middle-income countries. The reports will: • Complement the information for 123 low- and middle-income countries presented in Interna- tional Debt Statistics (IDS 2022), published in October 2021 with regional and country specific analyses on the composition and characteristics of external debt stocks and flows. These anal- yses are underpinned by the detailed loan-by-loan data on stocks, transactions (commitments, disbursements, and debt service payments) and loan terms reported to the World Bank Debtor Reporting System (DRS); • Draw from the high-frequency, Quarterly External Debt Statistics (QEDS) and Quarterly Public Sector Debt (QPSD) databases to provide users with syntheses of emergent trends in external and public debt, and preliminary estimates of 2021 external debt stocks; • Provide information on current issues and ongoing initiatives aimed at improving external and public debt transparency, including improvements in monitoring and reporting public debt in low- and middle-income countries, filling data gaps, and enhancing debt data dissemination, both coverage and ease of access. Debt Report 2022 Edition I presents summary analyses of the composition of external debt stocks and flows from the regional perspective. It draws out the main messages of the regional and country specific data and incorporates updates to the 2020 data included in IDS 2022. The report also presents updated data on the outcomes of the Debt Service Suspension Initiative (DSSI). The updated dataset was released in December 2021 and is available to users at: https://data.worldbank.org/products/ids. 1 Regional Overview Financial flows to low- and middle-in- from $144 billion in 2019, and a 13 percent rise in come countries fell for the third consecutive net equity inflows to $234 billion. This was a marked year in 2020. Aggregate net financial flows, debt contrast to aggregate net financial flows to other low- and equity combined, totaled $907 billion in 2020, and middle-income countries, which fell 27 percent 4.8 percent lower than the comparable figure for in 2020 to $440 billion, from $601 billion in 2019 on 2019. Measured relative to borrower countries’ account of a 21 percent contraction in debt inflows GNI aggregate financial flows were equivalent to 3.0 and 31 percent decrease in net equity inflows. With- percent, on a par with 2019 but well short of the in net equity flows, FDI fell 23 percent and portfolio 5.6 percent of GNI recorded in 2013. The downturn equity flows were negative, with an outflow of $24 in net financial flows was the outcome of a 14 per- billion compared to a small, $3 billon, inflow in 2019. cent contraction in net equity inflows which fell to The headline numbers masked sharp di- $472 billion from $552 billion in 2019. The net in- vergence in the volume and trend of financial flow of foreign direct investment, long considered flows with the largest borrowers recording the the most resilient and least volatile component of steepest contraction. Aggregate financial flows to financial flows to low-and middle-income countries, low- and middle-income countries’ top-ten borrow- fell 14 percent in 2020 to $432 billion, the lowest ers, excluding China (defined as those with the high- level in a decade. Portfolio equity inflows dropped est end-2020 external debt stock), fell to $152 billion 16 percent to $40 billion. In contrast, net debt in- in 2020, less than half the comparable figure for flows (gross disbursements of new financing minus 2019, reflecting a near total collapse in net debt in- principal payments) rose 9 percent to $435 billion flows, which dropped to $4 billion, from $109 billion from $400 billion in 2019. in 2019 and a 33 percent contraction in net equity China accounted for over half of the com- inflows. In other low- and middle-income countries, bined aggregate net inflows to low- and mid- excluding China, aggregate financial inflows rose 6 dle-income countries in 2020. As in prior years, percent in 2020 to $287 billion. Net debt inflows, ex- China dominated the volume and direction of ag- cluding China, rose 35 percent to $198 billion, offset- gregate financial flows to low- and middle-income ting a 28 percent fall in net equity inflows countries and was the single largest recipient with Close to half the 2020 aggregate financial combined debt and equity inflows of $467 billion in flows to low- and middle-income countries, ex- 2020. This was equivalent to 52 percent of 2020 ag- cluding China, went to countries in South Asia gregate financial flows to low- and middle-income and Latin America and the Caribbean. Aggregate countries. Inflows to China were driven by a 62 financial flows, excluding China, totaled $440 bil- percent increase in net debt inflows to $233 billion, lion in 2020 of which $104 billion (24 percent) went 2 to countries in South Asia, primarily India, and $102 inflows surpassed equity inflows by a wide margin billion (23 percent) to Latin America and Caribbean in 2020. Net debt inflows to countries in the East countries. For both regions, equity inflows were the Asia and the Pacific region, excluding China, were dominant component, accounting for 83 percent of $62 billion, equivalent to 74 percent of aggregate 2020 aggregate financial flows to South Asia and 74 financial flows to these countries in 2020 and 31 percent of those to Latin and America and the Ca- percent of net debt inflows to all countries, exclud- ribbean. Equity inflows to the two regions combined ing China. For countries in Europe and Central Asia, were $162 billion, equivalent to 68 percent of 2020 Middle East and North Africa and Sub-Saharan Af- equity inflows to all low- and middle-income coun- rica net debt inflows averaged 63 percent of aggre- tries, excluding China. In contrast, other regions debt gate financial flows to each region in 2020. Figure 1: Net Financial Flows by Regional Distribution, 2020 US$ (billion) 250 200 Debt Equity 150 100 50 0 China East Asia Europe Latin Middle South Sub-Saharan and and America & East and Asia Africa Pacific Central Caribbean North excl. Asia Africa China Sources: World Bank Debtor Reporting System, International Monetary Fund and United Nations Conference on Trade and Development (UNCTAD). Total external debt stocks of low- and China accounted for over a quarter of the middle-income countries rose 5.3 percent in end-2020 external debt stock of low- and mid- 2020 to $8.7 trillion, driven by an increase in dle-income countries. China’s external debt stock long-term debt. Long-term external debt, includ- rose 11 percent in 2020 to $2.3 trillion, propelled ing the IMF, rose 6 percent in 2020 to $6.3 trillion, by a 23 percent increase in long-term debt. The equivalent to 72 percent of total external debt stock, external debt stock of China’s public sector borrow- driven by a 9 percent rise in external public and ers rose 30 percent to $415 billion at end-2020 and publicly guaranteed debt, including obligations to the external debt stock of private Chinese entities, the IMF, and a much smaller 3 percent increase in without any government guarantee, rose 18 per- the non-guaranteed external debt of private sector cent to $688 billion. External short-term debt, $1.2 entities. Short-term debt stock, $2.2 trillion at end- trillion at end-2020, was up only 2.6 percent from 2020, was largely unchanged from 2019. The overall the end-2019 level, reflecting the slowdown in trade rate of debt stock accumulation in 2020 was compa- volumes induced by the global pandemic. However, rable to that in 2018 and 2019, but below the annual short-term debt remained by far the most significant average increase of 8 percent from 2011 to 2017. component of China’s total external debt stock, 53 This reflects a much slower accumulation of exter- percent at end-2020. nal private non-guaranteed debt stocks, which rose The external debt stock of other low- and on average 3.3 percent per annum in 2018–2020 middle-income countries, excluding China rose, compared to an annual average increase of 8.6 per- on average 3.3 percent in 2020 to $6.3 trillion but cent from 2011 to 2017. The 2020 increase in ex- with wide divergence at the regional and individ- ternal debt stocks resulted from net debt inflows of ual country level. The nine largest low- and mid- $435 billion and valuation changes in year-on-year dle-income countries, excluding China, had a com- exchange rates in relation to the U.S. dollar (about bined external debt stock of $3.5 trillion at end-2020, half the external debt of low- and middle-income little changed from the end-2019 level. In contrast, countries is denominated in currencies other than the external debt stock of other low- and middle-in- the U.S. dollar). come countries, excluding China and the largest 3 nine, rose on average, 8.7 percent to $2.8 trillion. At the regional level the pace of debt stock accumula- Figure 2: Change in External Debt Stock by tion in 2020 appeared divergent, ranging from an Regional Distribution, 2019-2020 average increase of 8.5 percent for countries in the US$ (billion) Middle East and North Africa to a marginal, 0.3 per- Sub-Saharan Africa cent decrease for those in Latin America and the Ca- 2020 ribbean. However, when the major borrowers were South Asia 2019 excluded the picture changed significantly. The aver- age rate of external debt stock accumulation in 2020 Middle East and North Africa remained lowest for countries in Latin America and the Caribbean, but rose to an average of 8.4 percent Latin America & Caribbean excluding Argentina, Brazil, and Mexico. For coun- tries in Sub-Saharan Africa, it increased to an aver- Europe and Central Asia age of 10.8 percent, excluding South Africa. It was East Asia and Pacific excl. unchanged at 8.5 percent the Middle East and North China Africa region which had none of the major borrow- China ers. For the other three regions, it converged, with an average increase for countries in East Asia and the 0 500 1000 1500 2000 2500 Pacific of 9.6 percent, for countries in Europe and Central Asia of 9.7 percent, and those in South Asia, Source: World Bank Debtor Reporting System. 9.4 percent. Net debt inflows to China and other low- remained small, 3 percent. Net long-term debt in- and middle-income countries in 2020 took very flows to low- and middle-income countries, excluding different trajectories. Net debt inflows to low- and China were bondholders at $94 billion (44 percent) middle-income countries rose 9 percent in 2020 and multilateral creditors at $116 billion (54 percent). to $435 billion with a 13 percent rise in long-term The remaining inflows were from bilateral creditors. debt inflows offset by a steep contraction in short- Flows from commercial banks and other private cred- term debt inflows. They fell 43 percent to $17 bil- itors were negative, an outflow of $8 billion. lion in 2020 from $29 billion in 2019, paralleling the At the regional level, the composition of sharp pandemic-induced slowdown in global trade. 2020 long-term debt inflows were divergent. Coun- The 2020 net debt inflows were characterized by a tries in Latin America and the Caribbean accounted marked divergence between those to China and oth- for the largest share, $76 billion (35 percent) of 2020 er low- and middle-income countries. Net debt flows net long-term debt inflows, followed by the East Asia to China rose 62 percent to $233 billion, on account and the Pacific region, excluding China, $47 billion of a 28 percent increase in long-term debt inflows (22 percent), and countries in Sub-Saharan Africa $32 and short-term debt inflows of $31 billion; a reversal billion (15 percent). Regarding the composition of from outflows of $14 billion in 2019. Net debt in- long-term debt inflows, 62 percent of inflows to Latin flows to other low- and middle-income countries fell American and the Caribbean and 42 percent of those 21 percent in 2020 to $202 billion, their lowest level to countries in East Asia and the Pacific region were since 2016, because of short-term debt outflows of from bondholders. Inflows in 2020 to Sub-Saharan $14 billion from inflows of $43 billion in 2019. Long- Africa were entirely from official creditors, where an term debt inflows were $216 billion in 2020, virtually overwhelming share was from multilateral creditors. the same as the 2019 level. Flows from bondholders were negative, an outflow of Over 95 percent of 2020 net long-term $4 billion. The $23 billion in inflows to countries in debt inflows were from bondholders and mul- South Asia were also dominated by those from offi- tilateral creditors. Net inflows from bondholders cial, bilateral, and multilateral creditors. It accounted totaled $278 billion and accounted for 67 percent for 55 percent of 2020 bilateral inflows to all low- and of net long-term debt inflows to low- and middle-in- middle-income countries, excluding China. In Europe come countries in 2020, much the same share as and Central Asia, inflows totaled $25 billion with in- 2019. The significant shift in the composition of flows from bondholders of $30 billion, and multilater- 2020 debt inflows was the surge in inflows from al creditors $11 billion offsetting outflows of $14 bil- multilateral creditors. They rose to $116 billion in lion to private creditors and a much smaller outflow 2020, more than double the 2019 level, raising their of $1 billion to bilateral creditors. It was a similar sto- share of long-term debt inflows to 28 percent, from ry for countries in the Middle East and North Africa. 16 percent in 2019 and offset a 79 percent fall in in- Inflows totaled $14 billion of which $17 billion was flows from private creditors. Inflows from bilateral from multilateral creditors and $6 billion was from creditors increased in 2020 to $12.6 billion, nearly bondholders and was offset by outflows to private double to 2019, but their share of total debt inflows creditors. 4 Figure 3: Net Long-Term Debt Inflows by Creditor Type and Regional Distribution, 2020 US$ (billion) 100 Bilateral creditors Multilateral creditors incl. IMF 80 Bondholders 60 Bank and other private creditors 40 20 0 -20 East Asia and Europe and Latin America Middle East and South Asia Sub-Saharan Pacific excl. China Central Asia and Caribbean North Africa Africa Source: World Bank Debtor Reporting System. The Debt Service Supension Initiative The Debt Service Suspension Initiative With reference to the amount of debt deferred, Ken- (DSSI) was launched by G-20 countries in April ya did not request participation in the initiative until 2020 to assist the poorest countries to cope 2021 and paid all 2020 debt service due to bilateral with the costs of the COVID-19 pandemic. It of- creditors. Australia and Papua New Guinea agreed fered 73 IDA-eligible and least developed countries on a refinancing operation instead of a deferral, and a temporary suspension of debt-service payments the estimated $357 million deferral reported by Par- owed to official bilateral creditors. The suspension is Club creditors as the amount eligible for deferral period was originally set to cover principal and in- for the Republic of Yemen is not included. The Re- terest payments falling due from May 1-December public of Yemen, a country in conflict, did not report 31, 2020 but was subsequently extended to end-De- to the DRS in 2020. cember 2021. Under this initiative debt-service pay- ments are deferred and repaid over 4–6 years after Figure 4: DSSI-Participants Bilateral Debt Service a 1-year grace period. As of end-December 2020, Paid and Deferred in 2020, Regional Distribution 43 of the eligible 73 countries were participating in US$ (billion) DSSI. 7 DSSI-participants reported $3.1 billion in debt service payments to bilateral creditors was deferred in 2020. This figure includes defer- 6 rals agreed with G-20 countries and non-G-20 bilat- Debt Deferred eral creditors, notably Kuwait and the United Arab 5 Emirates, participating in the initiative on compara- Debt Service Paid ble terms. Debt service deferred in 2020 included $0.7 billion in deferred interest payments, capital- 4 ized, and added to debt stocks. This was in line with the common term sheet adopted for the initiative, 3 which defines the standstill in payments as net pres- ent value neutral. The figure of $3.1 billion is revised 2 downwards from the $3.5 billion given in IDS 2022 published in October 2021. The primary reason for this revision is a change in the data for the Maldives 1 which inadvertently reported external debt stock for the loans subject to the deferral, not the actual 0 debt service deferred. Some DRS reporters signaled South Asia Sub-Saharan East Asia and Other regions that agreement on deferral has been reached with Africa the Pacific G-20 creditors, but administrative procedures were Source: World Bank Debtor Reporting System. still ongoing, and that data reported were estimates. 5 Countries in South Asia and Sub-Saharan lion. Except for Myanmar, which reported debt ser- Africa were the principal beneficiaries of the vice deferred of $208 million, amounts deferred in debt service deferral. Pakistan recorded the larg- other regions were negligible. Together, countries est debt service deferral in 2020, $1.3 billion, equiva- in South Asia and Sub-Saharan Africa accounted for lent to 42 percent of the debt service deferred for all 91 percent of the $3.1 billion debt service deferred. DSSI- participating countries. Twenty-eight countries Aside from the debt service deferred, DSSI-partic- in Sub-Saharan Africa reported debt service deferred ipating countries reported $9.4 billion in debt ser- in 2020 of which the largest was Angola at $572 mil- vice payments to bilateral creditors in 2020. East Asia and the Pacific Figure 5: Net Debt and Equity Inflows excluding Net financial flows totaled $551 billion in China, 2011-2020 2020, an increase of 22 percent from the prior year, US$ (billion) propelled by a 33 percent rise in debt and equity 160 Net equity inflows flows to China. In contrast, comparable net flows to other countries in the region fell 15 percent. Net debt inflows 140 The volume and trend of net aggregate financial flows was determined by China which 120 accounted for 85 percent of the combined debt and equity inflows to the region in 2020. Aggre- 100 gate financial flows, debt and equity combined, rose 22 percent in 2020 to $551 billion on account of a 57 80 percent rise in net debt inflows to $295 billion. Net 60 equity inflows continued their downward trajecto- ry, falling a further 2 percent in 2020 to $256 billion 40 following the 11 percent decline in 2019. Aggregate financial flows to China rose 33 percent in 2020 to 20 $467 billion driven by a 62 percent increase in net debt inflows and 13 percent rise in net equity inflows. 0 The factors that drove the level and composition 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 of debt and equity inflows to China are discussed Sources: World Bank Debtor Reporting System, International in IDS 2022 overview section and Box 1. Excluding Monetary Fund. 6 China, net financial flows to other countries in the Asian Infrastructure Bank. The Philippines received region fell for the third consecutive year, declining a 62 percent of inflows from the Asian Development further 15 percent to $83 billion with debt and equi- Bank. Inflows of $4 billion from bilateral creditors ty flows on alternate trajectories. Net debt inflows in 2020 also came primarily from lenders in the rose, on average, 41 percent to $62 billion whereas region, including Japan for $1.6 billion and Austra- net equity inflows fell 61 percent to $21 billion, the lia for $1 billion. Indonesia received 46 percent of lowest level in a decade. These outcomes were driv- inflows from bilateral creditors, followed by Myan- en in large part by developments in Indonesia and mar, 19 percent, and the Philippines, 18 percent. Thailand. FDI inflows to Indonesia fell 23 percent to $19.3 billion following a steep fall in investment in manufacturing. In Thailand, FDI flows were negative, Figure 6: Creditor Type Composition of Net Debt with an outflow of $5.1 billion reflecting dis-invest- Inflows excluding China, 2011-2020 ment by Tesco (United Kingdom) to a Thai investor US$ (billion) group for $10 billion. Investor retreat from the In- donesian and Thai stock markets also accounted for 50 Official creditors Bondholders over 80 percent of the $15 billion outflow of port- Commercial banks Short term folio equity, compared to a small, $1 billion, inflow 40 in 2019. Among the smaller economies, FDI inflows to the People’s Democratic Republic of Lao rose 28 30 percent in 2020 to $968 million, reflecting booming investment in large-scale infrastructure by Asian, pri- 20 marily Chinese, investors. Net debt inflows to the region, excluding 10 China, rose 41 percent in 2020 to $62 billion on account of a 9 percent rise in long-term debt and 0 short-term debt inflows of $15 billion, up from $1 billion in 2019. The rise in long-term debt flows was -10 driven by inflows from official creditors which more than quadrupled to $16.3 billion in 2020, from $3.5 -20 billion in 2019. Net inflows from private creditors fell 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 22 percent with a 52 percent rise in net inflows from commercial banks and other private entities offset Source: World Bank Debtor Reporting System. by a 39 percent contraction in inflows from bond- holders which bondholders fell 39 percent to $19.9 Eleven countries of the sixteen countries billion, from $32.7 billion in 2019. Thailand account- in the region are classified as IDA borrowers with ed for much of the increase in inflows from commer- a combined external debt of $102.5 billion at end- cial banks and other private entities. Inflows from 2020. This debt stock comprised public and public- commercial banks to non-guaranteed private sector ly guaranteed debt, including the IMF, $50.8 billion borrowers in Thailand rose to $6.7 billion in 2020, (49.6 percent), non-guaranteed external debt of pri- from an outflow of $0.4 billion the prior year. Thai- vate sector entities $43.3 billion (42.2 percent) and land also accounted for the surge in short-term debt short-term debt $8.4 billion (8.2 percent). Mongolia inflows, recording inflows of $15 billion in 2020 com- was the largest debtor in the group, with an external pared to a $3.6 billion outflow in 2019. Indonesia debt stock of $33.2 billion at end-2020, followed by drove the downturn in inflows from bondholders. It Papua New Guinea ($18.0 billion), Cambodia ($17.6 was one of the first countries to re-enter internation- billion) and the People's Democratic Republic of Lao al capital markets after the pandemic induced global ($17.2 billion). With regard to the composition of lockdown with the $4.3 billion sovereign Eurobond end-2020 public and publicly guaranteed debt stock, issue in April 2020. But a slowdown in non-resident on average 56 percent was owed to bilateral cred- investors’ purchase of bonds issued in the domestic itors, 31 percent to multilateral creditors and the market reduced the government’s overall 2020 bond remaining 13 percent to private creditors, including issuance to $19.2 billion, from $26.4 billion in 2019, bondholders, commercial banks, and other private reducing net inflow to $8.8 billion from the prior entities. For individual countries the volume and year level of $22.3 billion. Inflows from multilateral composition of external public debt stocks was di- creditors, including the IMF, rose threefold to $12.4 vergent. Myanmar had the largest external public billion from $3.9 billion in 2019, of which $6.5 billion debt stock among the region’s IDA borrowers, $13.3 (52 percent) was from the Asian Development Bank billion at end-2020, of which $9.6 billion (73 percent) and a further $2 billion (16 percent) was from the was owed to bilateral creditors. In Cambodia and 7 the People's Democratic Republic of Lao 68 percent group’s largest bilateral creditor accounted for 54 and 66 percent, respectively, of end-2020 external percent of end-2020 bilateral debt stocks followed public debt stock was owed to bilateral creditors. In by Japan with 24 percent. The Asian Development contrast in Papua New Guinea $3.1 billion (55 per- Bank was the largest multilateral creditor, account- cent) was owed to multilateral creditors, while in ing for 51 percent of debt owed to multilateral cred- Mongolia $3.9 billion or 39 percent of the end-2020 itors, including the IMF, followed by the World Bank debt stock was owed to private creditors. China, the (IBRD and IDA) with 31 percent. Figure 7: IDA Borrowers – Creditor Type Composition of External Public Debt Stock, end-2020 US$ (billion) 14 Bilateral creditors Multilateral Creditors Private creditors 12 10 8 6 4 2 0 Myanmar Lao PDR Mongolia Cambodia Papua and New Other IDA-eligible Guinea countries Source: World Bank Debtor Reporting System. Europe and Central Asia The 26 percent fall in net financial flows in responding 65 percent fall in net equity inflows. 2020 to $72 billion reflected in large part the $12 bil- The increase in debt inflows was driven by a sharp, lion outflow of debt and equity from the Russian Fed- 134 percent rise in long-term debt inflows and more eration. Net financial flows to other countries rose moderate, 22 percent, increase in short-term debt 38 percent in 2020 with net debt inflows increasing inflows. Regarding equity inflows the downturn was to $58 billion from $17 billion in 2019. widespread. FDI inflows fell 41 percent to $43 bil- Aggregate financial flows to the region lion, the lowest level in two decades, with only three fell 26 percent in 2020 to $72 billion, with a 63 countries in the region, Belarus, Bulgaria, and Koso- percent rise in net debt inflows offset by a cor- vo recording higher FDI inflows in 2020. Portfolio 8 equity outflows widened to $19 billion, from $4 bil- $58 billion from $17 billion in 2019 with an ap- lion in 2019. The region trend was dictated by the preciable rise in both long- and short-term debt. near complete reversal in the direction of aggre- Long-term inflows were $35 billion in 2020, more gate financial flows to the Russian Federation. They than four times the 2019 level of $10 billion and turned to an outflow of $12 billion in 2020 compared short-term inflows rose to $23 billion, from $9 billion to inflows of $37 billion in 2019. The drop in debt in 2019. Most of the 2020 long-term debt inflows (87 inflows to Russia was the result of non-resident percent) went to public and publicly guaranteed bor- holders’ sell-off of domestically issued bonds. This rowers but inflows to private sector borrowers were led to a $6 billion outflow in 2020, as compared to also higher. They rose to $4 billion in 2020 as com- inflows of $27 billion in the prior year. Additionally, pared to outflows of $2.5 billion in 2019. The volume short-term flows turned from inflows of $9 billion in and composition of 2020 debt inflows varied widely 2019 to a small, $0.3 billion, outflow in 2020. Net at the country level and were highly concentrated. FDI inflows to the Russian Federation fell 55 percent Romania, by far the largest recipient, accounted for to $13 billion with new policies aimed at diversify- 52 percent of long-term debt inflows to the region ing FDI derailed by the pandemic and investments in 2020, excluding the Russian Federation, and Ka- in high-tech industries falling off sharply. Investors zakhstan for another 23 percent. Total 2020 debt in- also withdrew from Russian stocks, widening port- flows to Romania were $18 billion, compared to $3.6 folio equity outflows to $15 billion up from $4 billion billion in 2019, of which 84 percent were long-term in 2019. Aggregate financial flows to other coun- debt inflows to the government and other public tries in the region rose 38 percent in 2020, to $84 sector borrowers. In contrast, in Kazakhstan where billion, driven by a 241 percent rise in net debt in- long-term debt inflows rose to $7.1 billion in 2020, 93 flows. Equity inflows fell, on average, 41 percent but percent were accounted for by non-guaranteed pri- there was marked divergence at the country level. vate sector borrowers. Net debt inflows to Turkey, For example, in Turkey FDI inflows fell 16 percent to the region’s largest debtor after the Russian Federa- $8.8 billion with only a rebound in investment the tion, were $4.7 billion in 2020, compared to outflows second half of the year preventing a steeper decline. of $3.7 billion in 2019. The 2020 debt flows were In Ukraine, they dropped 94 percent, to $272 million, characterized by a $14.6 billion outflow from Turkish from $4.9 billion in 2019, undermined by macroeco- private non-guaranteed borrowers to private credi- nomic issues and geopolitical tensions. tors offset by $15 billion in short-term debt inflows. Net debt inflows to countries in the re- Long-term debt inflows to public sector borrowers gion, other than the Russian Federation, rose to fell 6 percent in 2020 to $4 billion. Some of the small Figure 8: Net Debt Inflows by Creditor Type Figure 9: Creditor Type Composition of Net Debt excluding Russia, 2011-2020 Inflows, 2020 US$ (billion) US$ (billion) 120 Russia net debt inflows Russia net equity inflows Other ECA excl. Russia 100 ECA net debt inflows excl. Russia Uzbekistan 80 ECA net equity inflows excl. Russia Ukraine 60 Turkey 40 20 Romania 0 Kazakhstan -20 Bulgaria -40 Belarus -60 -20 -10 0 10 20 30 -80 Public and publicly guaranteed Private non-guaranteed -100 Short-term 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: World Bank Debtor Reporting System. Source: World Bank Debtor Reporting System. 9 countries in the region recorded the fastest rise in outflow of $1.2 billion. In contrast inflows from multi- net debt inflows in 2020. In Bosnia, total debt in- lateral creditors, including the IMF, rose to $10.8 bil- flows rose from $48 million in 2019 to $695 million lion, from outflows of $3.4 billion in 2019. Support to in 2020 and in Moldova they increased tenfold from mitigate the economic and social costs of the global $67 million to $676 million. In both countries the pri- pandemic drove this increase. Inflows to Romania mary driver was the rise in inflows from multilateral were a significant factor and accounted for the larg- creditors, largely the IMF and the World Bank. est share, 39 percent of 2020 inflows from multilat- Bondholders and multilateral creditors eral creditors. This reflected the $4 billion support were the driving force of the increase in net in- from the European Union’s temporary ‘Support to flows of public and publicly guaranteed debt in Mitigate Unemployment Risks in an Emergency’ 2020. Excluding Russia, net long-term inflows of (SURE) program. Net inflows from the IMF rose to public and publicly guaranteed debt, including the $3.3 billion in 2020, of which one-third were account- IMF, totaled $31 billion in 2020 up from $10.6 billion ed for by inflows to Ukraine under the $5 billion in 2019. Sixty-nine percent of the 2020 net inflows 18-month Standby Arrangement approved in June ($21.5 billion) were from private creditors and 31 2020. Other major recipients of inflows from the IMF percent ($9.6 billion) from official creditors. Inflows in 2020 were Uzbekistan ($384 million), Bosnia and from private creditors were accounted for almost Herzegovina ($369 million) and Georgia ($314 mil- entirely by bondholders. They rose 54 percent to lion). Net inflows from the World Bank totaled $1.1 $21.4 billion. The net inflow from commercial banks billion in 2020, a tenfold increase from 2019. Uzbeki- and other private creditors was negligible, $0.1 bil- stan was the primary recipient with combined net in- lion. Romania accounted for 52 percent ($11.1 bil- flows from IBRD and IDA of $978 million, followed lion) of the inflows from bondholders in 2020 fol- by Romania and Ukraine with $425 million and $381 lowed by Turkey 24 percent ($5.2 billion) and Serbia million, respectively, from IBRD. Some countries, in- 11 percent ($2.3 billion). Regarding official creditors, cluding Azerbaijan, Bulgaria, Kazakhstan, and Turkey flows from bilateral creditors remained negative, an recorded outflows to the World Bank in 2020. Figure 10: Net Inflows of Public and Publicly Guaranteed Debt by Creditor Type, 2020 Percent 100 80 60 40 20 0 -20 -40 Romania Turkey Uzbekistan Serbia Georgia Ukraine Other ECA Bilateral creditors Multilateral creditors Private Creditors countries Source: World Bank Debtor Reporting System. Latin America and Caribbean Net financial flows fell 46 percent in 2020 to term debt. The combined short-term debt outflows $102 billion, the lowest level in a decade in absolute from the big three, Argentina, Brazil, and Mexico terms, and measured in relation to GNI. Debt inflows were $48 billion in 2020. Long-term debt inflows, fell 54 percent with short-term debt outflows offset- including from the IMF, rose 54 percent to $76 bil- ting increased long-term inflows from bondholders lion divided between bondholders, 62 percent, and and emergency, Covid-related support, from the IMF multilateral creditors 38 percent. This rise in inflows and World Bank and equity inflows fell 41 percent. reflected large-scale emergency support from the Aggregate net financial inflows to the re- IMF and the World Bank to mitigate the social and gion fell 46 percent in 2020, the lowest level in economic costs of the Covid-19 pandemic. The im- a decade, on account of a 54 percent fall in net pact of the pandemic also weighed heavily on in- debt inflows and 42 percent decline in net equi- vestment flows and FDI inflows which fell more than ty inflows. The downturn in net debt inflows was one-third in 2020 to $81 billion, the lowest level in driven entirely by the $49 billion outflow of short- a decade. Inflows to Brazil, the region’s largest FDI 10 recipient, fell 37 percent, to $41 billion, despite some kets, notably Brazil. It registered outflows of $5.9 bil- sizeable gains from privatization. Inflows to Mexico lion in 2020, up from $1.8 billion in 2019. were down 28 percent to $23 billion and would have The 54 percent rise in long-term debt fallen further had it not been for reinvested earn- flows in 2020 was driven by a parallel rise in in- ings which accounted for around 60 percent of 2020 flows from bondholders and multilateral credi- inflows. A downgrade of the investment rating and tors. Net long-term inflows from private creditors political unrest weighed on FDI inflows to Colombia, rose 51 percent in 2020 to $47 billion and were pri- which dropped 54 percent to $5.1 billion in 2020. FDI marily from bondholders and to public sector enti- to Peru fell 53 percent to $2.4 billion and in Panama ties. Net inflows from official creditors, including the they turned negative, an outflow of $890 from in- IMF, were $29 billion in 2020, 59 percent higher than flows of $2.4 billion in 2019, despite measures by the the comparable figure for 2019, and virtually all from government to counter the economic impact of the multilateral creditors. The combined net long-term pandemic. Portfolio equity outflows also widened to debt inflows to the three largest debtors, Argentina, $6.5 billion, double the comparable outflow in 2019, Brazil, and Mexico, rose 46 percent to $31 billion, as investors also retreated from regional stock mar- equivalent to 41 percent of net inflows to the region Figure 11: Net Debt and Equity Inflows to Select Figure 12: Composition of Long-term Net Debt Countries, 2019-2020 Inflows, 2018-2020 US$ (billion) US$ (billion) Bilateral creditors 70 Argentina 140 Multilateral creditors (incl. IMF) 60 Brazil Bonds 120 50 Mexico Commercial banks 40 Other LAC countries 100 Total long-term debt 30 80 20 10 60 0 40 -10 -20 20 -30 Net Equity Net Equity Net Debt Net Debt 0 2019 2020 2019 2020 -20 Sources: World Bank Debtor Reporting System, International 2018 2019 2020 Monetary Fund. Source: World Bank Debtor Reporting System. 11 in 2020 of which over 90 percent were from private creditors. Outcomes at the country level were diver- Figure 13: Bond Issuance by Borrower Type, gent. Inflows to Brazil rose to $17 billion, from an Gross and Net Flow, 2018-2020 outflow of $9 billion in 2019, following a turnaround US$ (billion) in the direction of flows from bondholders and other PPG bonds net flow private creditors. In Argentina, net long-term inflows fell 75 percent to $2.8 billion because of zero inflow PPG bonds issuance from the IMF, compared to $16.2 billion in 2019, and (disbursement) $2.7 billion outflows to commercial banks and other private creditors from non-guaranteed private sec- PPG bonds principal payment tor entities. In Mexico, they dropped 38 percent on 2020 account of a contraction in inflows from bondhold- PNG bonds net flow ers and commercial banks to public sector borrow- 2019 ers. Net long-term debt inflows to other countries in PNG bonds issuance 2018 the region were $45 billion, 61 percent higher than (disbursement) the 2019 level, of which over half, 56 percent were PNG bonds principal from multilateral creditors. The IMF and the World payment Bank accounted for 70 percent of 2020 inflows from multilateral creditors. Inflows from the IMF totaled -50 0 50 100 $13.3 billion and those from the World Bank, large- Source: World Bank Debtor Reporting System. ly IBRD, were $6.8 billion, over three times the 2019 level. Regarding borrowers, 72 percent of inflows from the IMF were accounted for by Colombia ($5.2 Middle East and North Africa billion) and Ecuador ($4.4 billion) and 65 percent of those from the World Bank by Peru ($1.9 billion), Ec- Net financial flows fell 19 percent in 2020 uador ($1.3 billion) and Colombia ($1.1 billion). to $31 billion the lowest level since 2015. Equity in- Net inflows from bondholders rose 81 per- flows remained on a downward trajectory, falling 29 cent in 2020 to $47 billion following a 16 percent percent to a decade low of $12 billion. Debt inflows increase in new issuance and lower repayment fell 11 percent with a sharp increase in inflows from on maturing bonds. The combined issuance by pub- multilateral creditors offset by outflows to private lic and private sector borrowers in the region totaled creditors. $105 billion in 2020, a 16 percent increase over the Aggregate net financial inflows to the re- comparable figure for 2019. Issuance by public sec- gion fell 19 percent in 2020 to $31 billion, their tor entities rose 20 percent to $78 billion and those lowest level since 2015 due to an 11 percent of non-guaranteed private sector entities increase 6 decline in net debt inflows and a more severe, percent to $27 billion. New bond issuance by public 29 percent, contraction in net equity flows. Net and private sector entities in Mexico totaled $44 bil- long-term debt inflows fell 7 percent in 2020 to $14.4 lion, virtually the same amount as 2019, and equiva- billion on account of a $3.9 billion outflow to private lent to 42 percent of bond issuance by the region in creditors. Net flows from bondholders fell 37 per- 2020. Issuance by Peru, one of the countries hard- cent, but remained positive at $5.6 billion, but flows est hit by the global pandemic, rose nearly tenfold in from commercial banks and other private entities 2020 to $7 billion from $750 million in 2019. Sover- were negative. Outflows to these creditors widened eign issues by Colombia rose 177 percent in 2020 to to $9.5 billion in 2020, from $2 billion in 2019. In $8.3 billion and doubled in the Dominican Republic contrast, net inflows from official creditors rose to to $8.3 billion. High-yielding corporates in Brazil and $18.3 billion, more than twice the 2019 level, driven Mexico accounted for 75 percent of 2020 issuance by in large part by a threefold increase in inflows from non-guaranteed private sector entities. Net inflows the IMF. Short-term debt inflows totaled $4 billion, from bondholders were $47 billion in 2020. Net in- 23 percent below the 2019 level. On the equity front, flows to public sector borrowers accounted for 93 FDI inflows fell 15 percent in 2020 to $14.1 billion, percent of these inflows. Repayment on maturing the lowest level in a decade. Inflows to Egypt, the bonds drove the composition of these inflows. Prin- region’s largest FDI recipient, declined by 35 percent cipal repayments on maturing bonds issued by pub- to $5.9 billion despite concerted efforts to promote lic sector borrowers fell 20 percent in 2020 to $34 diversification of FDI here most investments were in billion from $43 billion in 2019 enabling net inflows the oil and gas sector. FDI inflows to Tunisia fell to to rise to $44 billion, almost double the 2019 level. In 27 percent below the 2019 level, to $600 million, due contrast principal repayments on maturing bonds is- to a steep fall in investments in the service sectors sued by private sector entities rose 8 percent in 2020 with tourism particularly hard hit. Morocco was a reducing the net inflow to $3.4 billion. bright spot, with FDI inflows rising 9 percent in 2020 12 to $1.5 billion. The country benefited from the es- (PLL) arrangement and $1 billion from the World tablished presence of multinational companies in Bank (IBRD). In Jordan, they were up 71 percent, to the automotive, aerospace, and textile industries $1.2 billion, of which 42 percent was from the IMF. and investment into phosphates, of which it holds Egypt’s net long-term debt inflows fell 10 percent in the world’s largest known reserves. 2020 to $13.2 billion, in large part due to higher re- Long-term debt inflows to the region fell payments on maturing bonds. In contrast, inflows 7 percent in 2020 but this was largely the result to Morocco more than doubled to $8.2 billion, from of outcomes in Lebanon; for other countries in $3.8 billion in 2019, and in Jordan they rose three- the region they rose, on average, 19 percent. The fold in 2020 to $2.4 billion propelled by inflows from economic and financial crises in Lebanon led to the the IMF and bondholders. collapse of long-term debt inflows to public sector External debt ratios are on a rising tra- borrowers and an outflow of $10.3 billion, double jectory for most countries in the region. Histor- the comparable figure in 2019, from non-guaran- ically, the ratios of external debt-to-GNI and debt- teed private sector borrowers to commercial banks and other private creditors. Long-term debt inflows Figure 14: Debt and Equity Inflows, 2011-2020 to the rest of the region rose, on average, 20 per- US$ (billion) cent to $24.7 billion reflecting support from multi- 35 lateral creditors to mitigate the economic and social Long-term debt costs of the global pandemic, and sovereign bond 30 Short-term debt issuance by Egypt, Morocco, and Jordan totaling Equity 25 $11.1 billion. Egypt and Morocco, the region’s two largest borrowers, accounted for 87 percent of the 20 2020 inflows. Net inflows from multilateral credi- tors rose from $7.6 billion in 2019 to $17.4 billion 15 in 2020, and of these, 75 percent were from the IMF 10 and the World Bank. In Egypt, multilateral creditors accounted for 77 percent of long-term debt inflows 5 in 2020. They totaled $10.2 billion, of which $6.5 billion from the IMF, including $2.8 billion in emer- 0 gency Covid-related support approved in May 2020 and $2.4 billion from the 12-month $5.2 Standby -5 Arrangement approved in June 2020. In Morocco, -10 inflows from multilateral creditors rose fourfold in 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 to $4.8 billion of which $3 billion was from Sources: World Bank Debtor Reporting System, International Monetary the IMF under the Precautionary and Liquidity Line Fund. 13 in many countries. This trend was exacerbated in Figure 15: Net Long-term Debt Inflows, 2018-2020 2020 by the impact of the global pandemic with ex- US$ (billion) port earnings for countries in the region falling, on 20 average, 33 percent. The external debt-to-export ra- 2018 tio rose from an average of 53 percent in 2011 to 198 15 2019 percent in 2020 and the external debt-to-GNI ratio 2020 from 14.5 percent to 38 percent over the same peri- 10 od. Moreover, the regional aggregates mask much higher ratios in some countries because of Algeria’s 5 very low debt-to-exports and debt-to-GNI ratios, 20.1 percent and 3.6 percent, respectively, at end- 2020. The economic collapse in Lebanon pushed 0 external debt stock, in relation to exports and GNI, to one of the highest levels in the world, 681 per- -5 cent and 222.1 percent, respectively at end-2020. In Egypt, the combination of a 14 percent rise in exter- -10 nal debt stock and 25 percent fall in export earnings raised the external debt-to-exports ratio to 323.7 -15 percent in 2020 from 210.9 percent in 2019. It was a Egypt Jordan Lebanon Morocco Tunisia similar story for Jordan where debt rose 13 percent Source: World Bank Debtor Reporting System. and export earnings fell 35 percent raising the debt- to-exports ratio from 192 percent in 2019 to 337.4 to-exports for countries in the region were low due percent in 2020. Tunisia’s external debt-to-GNI ratio to robust export earnings and preponderance of rose only marginally in 2020 but surpassed 100 per- equity in net financial flows. In recent years howev- cent and in Jordan it reached 87.2 percent, up from er, a rapid rise in debt creating flows, coupled with a 75.2 percent in 2019. Egypt’s debt-to-GNI ratio fell downturn in global oil prices and contraction in other slightly in 2020 to 37.2 percent, from 39.4 percent in export earnings raised debt-to-export ratios sharply 2019, but has more than doubled since 2015. Figure 16: Debt Indicators for Select Countries, 2019-2020 US$ (billion) 800 700 Debt-to-Exports 2019 Debt-to-Exports 2020 600 Debt-to-GNI 2019 500 Debt-to-GNI 2020 400 300 200 100 0 Egypt Jordan Lebanon Morocco Tunisia Regional average Sources: World Bank Debtor Reporting System, International Monetary Fund. South Asia The 14 percent fall in net financial flows to net financial flows. In 2020, they dropped to just $104 billion in 2020 was driven by the near absence of $0.4 billion, less than 1 percent of net financial flows. debt inflows to India, which accounted for around 80 The downturn was driven by non-resident inves- percent of financial flows to the region. tors’ sell-off of bonds issued in the domestic market Net financial flows to India fell 12 percent and outflows from non-guaranteed private sector in 2020 to $85 billion characterized by a marked borrowers to commercial banks and other private change in composition. In 2019, net debt inflows creditors. Conversely, FDI inflows to India continued to India were $40 billion, equivalent to 41 percent of their upward trajectory, rising a further 38 percent in 14 2020 to $59.5 billion. These robust FDI inflows were bolstered by investment in power generation and a response to further relaxation of investment bar- the telecom sector by British and Chinese investors. riers, including in the retail and financial sector, and In Bangladesh, FDI is concentrated in export-ori- were also bolstered by $27 billion in mergers and ented garment manufacturing and inflows fell 21.4 acquisitions, including megadeals such as the $5.7 percent in 2020 to $1 billion due to cut-backs and billion acquisition by Jaadhu, a subsidiary of Face- order cancellations by US and European suppliers. book USA, by Jio Platforms. Portfolio equity inflows In Maldives, where FDI is mainly in the tourism sec- to India also surged to a record high of $25 billion, tor, the contraction was severe, with inflows down 81 percent above the prior year. This reflected 64 percent to $348 million. non-resident investors shift from debt to equities fueled by the prospect of higher stock market re- turns, a better-than-expected economic recovery Figure 17: Net Debt and Equity Inflows, 2011-2020 in the second half of 2020 and strong corporate US$ (billion) earnings. Net financial flows to other countries in the region fell, on average, 19 percent in 2020 to South Asia (excl. India) net $19 billion of which debt inflows accounted for 87 100 equity inflow percent. Net debt inflows declined 12 percent with India net equity a 14 percent increase in long-term debt inflows 80 South Asia (excl. India) net offset by a $0.5 billion outflow of short-term debt. debt inflow Long-term debt inflows from multilateral creditors 60 India net debt rose 29 percent led by a 45 percent increase in in- flows from the World Bank (IBRD and IDA) to $3 40 billion. Overall inflows from bilateral creditors fell 23 percent in 2020 primarily on account of a sharp 20 contraction in inflows to Pakistan. This downturn masked a sharp rise in bilateral creditors inflows to Bangladesh for large scale infrastructure proj- 0 ects. They rose 59 percent in 2020 to $3.9 billion of which 50 percent were from Japan, 23 percent from -20 the Russian Federation and 22 percent from China. FDI inflows to South Asian countries, other than -40 India, fell, on average, 25 percent in 2020 but out- 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 comes at the country level diverged. FDI inflows to Sources: World Bank Debtor Reporting System, International Pakistan fell moderately, 5 percent, to $1.9 billion, Monetary Fund. 15 South Asian countries excluding India, of external public debt to bilateral creditors while Pa- owed, on average, 85 percent of long-term exter- kistan’s obligations to official creditors were evenly nal public debt, including the IMF, to official bilat- divided between bilateral and multilateral creditors. eral and multilateral creditors at end-2020. The Maldives, Pakistan, and Sri Lanka have issued bonds combined external debt stock of these countries rose in international capital markets although none were 9 percent in 2020 to $258 billion. External public debt active in 2020. Private creditors (bonds, commercial stock, including the IMF, was $194 billion at end-2020, banks, and other private lenders) accounted for 30 12 percent higher than the end 2019 level and com- percent of Maldives’ end-2020 external public debt prised $69 billion (36 percent) owed to bilateral cred- stock, 12 percent for Pakistan and 43 percent for Sri itors, $96 billion (50 percent) to multilateral creditors, Lanka. The largest creditors were the World Bank including the IMF, and $28 billion (15 percent) to private (IBRD and IDA), with claims of $42 billion at end- creditors (bondholders, commercial banks, and other 2020, followed by China with $36 billion, the Asian private entities). At the country level, the composition Development Bank (ADB) with $34 billion and Japan, of external debt stocks varied. Multilateral creditors $18 billion. The World Bank and the ADB accounted accounted for 88 percent of end-2020 external public for almost 80 percent of debt owed to multilateral in- debt stock in Nepal and over 60 percent in Afghanistan stitutions and China and Japan for close to the same and Bangladesh. In contrast, Bhutan owed 71 percent share of debt owed to bilateral creditors. Figure 18: External Public Debt Stock, Creditor Composition, end-2020 Percent 100 90 80 70 60 50 40 30 20 10 0 Afghanistan Bangladesh Bhutan Maldives Nepal Pakistan Sri Lanka South Asia excl. India Bilateral creditors Multilateral creditors incl. IMF Private creditors Source: World Bank Debtor Reporting System. Across the region there was a marked de- earnings. Maldives was already facing macro-eco- terioration in debt indicators in 2020. While the nomic challenges and assessed a high risk of debt average ratio of external debt to GNI and to exports distress prior to the onset of the Covid-19 pandem- for the region remained moderate in 2020, 24.4 per- ic and its economy was hard hit by the global lock- cent and 138.4 percent, respectively, these averages down. External borrowing to mitigate the econom- were heavily weighted by the dominance of India’s ic and social cost of the pandemic raised external economy and its relatively low debt-to-GNI ratio and debt stocks 25 percent in 2020 against the backdrop debt-to-exports ratio, 21.4 percent and 111.2 percent, of a 31 percent decline in GNI, measure in US dollar respectively, at end-2020. When India is excluded, the terms, and 52 percent fall in export earnings. As a average ratios for other countries in the region rises result, the debt-to-exports ratio more than doubled to 35.1 percent for debt-to-GNI and 297.4 percent for to 186.8 percent in 2020, from 71.2 percent in 2019, debt-to-exports. In Pakistan, an 8 percent increase and the debt-to-GNI ratio rose to 96.9 percent from in external debt stocks and 11 percent fall in export the prior year level of 53.1 percent. Bhutan had the earnings pushed the debt-to-exports ratio to 419.2 highest debt-to-GNI ratio at end-2020, 132 percent percent in 2020, from an already elevated level, 346.3 up from 117 percent in 2019. The comparable ra- percent in 2019. Sri Lanka’s 2020 external debt stock, tio for Bangladesh remained low, 20 percent, and $56 billion, was unchanged from 2019, but the debt- relatively moderate in Pakistan, 45.3 percent, al- to-exports ratio rose to 424.2 percent from 285.4 per- though 15 percentage point higher than the 2017 cent in 2019 because of a 32 percent drop in export level. The ratio of international reserves to external 16 debt stock also varied widely. In India, internation- percent in 2019. The comparable 2020 ratio for the al reserves accumulated in 2020 and external debt regions’ other major borrowers ranged from 62.5 stocks were static resulting in a rise in the ratio of re- percent in Bangladesh down to 12.5 percent for Pa- serves to external debt to 97.3 percent, up from 77.1 kistan and 9.3 percent in Sri Lanka. Figure 19: External Debt Indicators, 2019-2020 Percent 450 400 350 300 250 200 150 100 50 0 Afghanistan Bangladesh Bhutan Maldives Nepal Pakistan Sri Lanka South Asia excl. India Debt-to-Exports 2019 Debt-to-Exports 2020 Debt-to-GNI 2019 Debt-to-GNI 2020 Sources: World Bank Debtor Reporting System, International Monetary Fund. Sub-Saharan Africa The 19 percent fall in financial flows to the re- standing $4.3 billion in emergency assistance from gion in 2020 was largely due to net debt outflows to the IMF to help mitigate the economic and social South Africa. Financial flows to other countries in the costs of the pandemic. The outflows in 2020 resulted region rose, on average 6 percent. from a combination of factors including a selloff of Net financial flows to the region in 2020 domestically issued bonds by non-resident holders, were a mixed bag with a 33 percent fall in net debt a 39 percent increase in outflows from non-guaran- inflows partially offset by a 26 percent rise in eq- teed private sector borrowers to their private cred- uity inflows. The downturn in net debt inflows was itors and a rise in short-term debt outflows to $6.8 driven by South Africa, the region’s largest debtor, billion. Overseas investors also retreated from the which recorded debt outflow of $6.7 billion in 2020, South African stock market, widening portfolio eq- compared to inflows of $4.2 billion in 2019, notwith- uity outflows by 20 percent to $5.2 billion. FDI was 17 a bring spot with inflows to South Africa rising 74 debt flows (disbursements) of public and publicly percent in 2020 to $3.1 billion. Net financial flows guaranteed debt to these countries were $44 bil- to countries in the region, other than South Africa, lion, 9 percent higher than the comparable figure rose, on average, 6 percent in 2020 propelled by a in 2019. Disbursements from multilateral insti- 19 percent rise in equity, primarily FDI inflows. Debt tutions, including the IMF, rose 60 percent to $28 inflows of $41 billion in 2020, were only marginally billion, bringing their share of total disbursements higher than in 2019, with both long- and short-term from all creditors to 64 percent, up from 44 per- inflows increasing by around 1 percent. The most cent in 2019. Disbursements from private credi- significant shift was in the composition of long-term tors fell 32 percent in 2020 to $9 billion, lowering debt inflows with those from multilateral creditors, their share of total disbursements to 21 percent, including the IMF, increasing by 65 percent, to $25 from an average of 40 percent over the 2018 to billion. Inflows from private creditors fell 52 percent. 2019 period. Disbursement from bilateral credi- The rise in equity inflows was uneven. As an exam- tors fell 27 percent in 2020 to $6.7 billion, equiva- ple, FDI Inflows to Togo increased 72 percent to $639 lent to 15 percent of long-term net inflows of public million, on account of investment from neighboring and publicly guaranteed debt. The driving force of countries. In Senegal, they rose 39 percent to $1.5 this shift in composition was the global pandemic. billion due to higher investments in the energy sec- Multilateral creditors, particularly the IMF and the tor and start-up of work on the country’s largest off- World Bank, ramped up lending to help borrowers shore oil and gas project. A slowdown in repatriation meet economic and social costs, but access to fi- of capital by multinational companies in the oil and nancing from private sources was curtailed. The gas industry reduced outflows from Angola to $2.0 global lockdown imposed in March 2020 effectively billion from $4.7 billion in 2019. In contrast, Ghana, closed international markets to IDA-eligible bor- the first African country on the continent to impose rowers in the region until Côte d’Ivoire’s €1 billion Covid related mobility restrictions, registered a 52 12-year Eurobond issue in November 2020 marked percent fall in FDI inflows in 2020. a return. Only Ghana issued a bond prior to the Over the past decade financing to Sub-Sa- lockdown, $3 billion in February 2020. Disburse- haran Africa has increasingly tilted towards ments from bondholders fell 44 percent in 2020 to non-concessional financing from private cred- $4.3 billion. The IMF and the World Bank accounted itors and non-traditional bilateral creditors. for 77 percent of 2020 disbursements from mul- This shift was particularly marked in the regions’ tilateral creditors. IMF purchases (disbursements) 38 IDA-eligible borrowers. In 2020, gross long-term rose to $12.3 billion, from $1.8 billion in 2020, of Figure 20: Net Debt and Equity Inflows, 2011-2020 Figure 21: Disbursements to IDA-eligible countries by US$ (billion) Creditor Composition, 2011 and 2015-2020 Percent Net debt inflows Net debt inflows excl. South Africa 100 70 Net equity inflows 90 Net equity inflows excl. South Africa 80 60 70 60 50 50 40 40 30 30 20 10 20 0 2011 2015 2016 2017 2018 2019 2020 Private creditors 10 Other multilateral creditors World Bank (IDA+IBRD) 0 IMF 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Bilateral creditors Sources: World Bank Debtor Reporting System, International Monetary Fund. Source: World Bank Debtor Reporting System. 18 which the three largest recipients, Ghana, Côte d’Ivo- debt owed to multilateral creditors, including the ire, and Nigeria accounted for 46 percent. Disburse- IMF, and 24 percent of total public and public guar- ments for IDA were already high, $8.8 billion in 2019, anteed debt. Debt owed to China, the second larg- and rose a further 6 percent in 2020 to $9.3 billion. est creditor, was $51 billion at end-2020, of which The combined external debt stock of the 57 percent of debt stock was owed to bilateral cred- 38 IDA-eligible countries in Sub-Saharan Africa to- itors. The IMF was the second largest multilateral taled $436 billion at end-2020, 12 percent higher creditor, $31 billion at end-2020, followed by the than the 2019 level, and over two and half times African Development Bank with $26 billion. Among the comparable debt stock in 2011. This was a bilateral creditors, debt owed to France was $10 bil- much faster pace of debt accumulation in 2020 than lion at end-2020 and to Japan and India $4.7 billion the average 3.4 percent rise in external debt stocks of and $4.3 billion, respectively. low- and middle-income countries, excluding China, in 2020. Public and publicly guaranteed debt for the Figure 22: IDA-eligible Countries Where 2020 External 38 IDA-eligible countries, including the IMF, rose, on Debt Stock Rose 20 Percent or More average, 14 percent in 2020 to $327 billion, equiva- Percent lent to 75 percent of total external debt. Non-guar- Malawi anteed private debt rose 9 percent to $78 billion and short-term debt remained static at $31 billion. Out- Burkina Faso comes for individual countries were divergent. In Uganda ten countries, the increase in external debt stock in 2020 surpassed 20 percent, ranging from Malawi (21 Rwanda percent) to Guinea (39 percent). The fastest growing Cote d'Ivoire component of public and public guaranteed debt in the 38 IDA-eligible countries was obligations to multi- Togo lateral creditors, including the IMF, which rose 23 per- Niger cent in 2020 to $160 billion. This was compared to a 7 percent rise in debt owed to bilateral creditors and Guinea-Bissau 8 percent increase in debt owed to private creditors. Benin As a result, on average, close to 50 percent of public and publicly guaranteed debt stock at end-2020 was Guinea owed to multilateral creditors. IDA was the 38 IDA-el- 0 10 20 30 40 igible countries' single largest creditor with claims of Sources: World Bank Debtor Reporting System, International Monetary $80 billion at end-2020, equivalent to 50 percent of Fund. 19