Over the last decade and a half, borrowing from international financial markets by Sub-Saharan African (SSA) governments has grown dramatically matched by a strong appetite from global investors. But many policymakers from the region and international institutions have expressed concern that there is an unjustified ‘SSA risk premium’ that imposes higher financing costs on the region compared to other developing and emerging regions with similar macroeconomic fundamentals and risk profiles.

William Gbohoui, Rasmané Ouedraogo and Modeste Some of the IMF and authors of "Sub-Saharan Africa’s Risk Perception Premium: In the Search of Missing Factors", discussed their findings with David Riley. Their recent IMF working paper seeks to answer the question whether there is indeed a sub-Saharan Africa premium. And if there is a SSA risk premium, is it because of ‘biased’ sovereign ratings from the major rating agencies or is it due to other factors and if so what can policymakers do to improve access to sustainable finance at a lower cost?

Video recording: Link

IMF Working Paper: Link