Gabon coup governer General Brice Oligui Nguema is sworn in as interim president during his swearing-in ceremony, in Libreville, Gabon, September 4, 2023.
LONDON – When Gabon’s General Brice Oligui Nguema expelled his distant cousin previous month, he became the eighth military governer who has got power by force in Africa since 2020. But one aspect about the nation was unique: it had sold a good enough amount of bonds on international capital markets, and had just weeks prior sealed continental Africa’s first debt-for-nature swap.
The putsch not only provided Gabon’s bonds tumbling 10%, but also hit those enforced by several other nations involving adjacent nation Cameroon, as jittery investors scanned for who might be next. The apparent coup trend is adding to other prominent problems deterring several investors from Africa – a wave of debt destructions, stressful geopolitics and an intense vulnerability to climate transformation.
“Around all markets in that area are paying an amount of price in terms of increasing cost of debt,” conveyed Sergey Dergachev, portfolio manager at Union Investment. A UNDP study dated July reveals how the costs add up. It estimated Guinea’s 2008 coup and one in Mali in 2012 wiped a combined $12-$13.5 billion off the two nations’ economies over a 5-year period. This represented 76% of Guinea’s 2008 gross domestic product and almost half of Mali’s 2012 GDP, the data revealed.