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Right Now, It’s the U.S. Fed, Not China That’s Making African Borrowers Very Nervous

The Federal Reserve building is pictured in Washington, DC, on January 22, 2022. Stefani Reynolds / AFP

While one U.S. foreign policy analyst after another sounds the alarm on the threats posed by Chinese debt in Africa and elsewhere, the reality is that finance policymakers across the continent are currently more anxious about what’s going to happen in Washington, specifically at the Federal Reserve.

The Fed is widely expected to raise interest rates at its next meeting in March in a bid to stem stubbornly high inflation in the U.S. If rates do go up, it could have a potentially severe impact on the continent’s already fragile balance sheets. Many African governments have been struggling to service their burgeoning debts while at the same time spending more on domestic social service programs.

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