Dollar Scarcity Divides Africa into Haves and Have-Nots
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Dollar scarcity is creating a divide between African countries that can access dollars and those that cannot. Investors are rewarding countries that are boosting dollar liquidity.
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Currencies and stocks are plunging in countries like Kenya and Zambia that lack dollars to service debts or import goods. IMF loans are helping some countries shore up reserves.
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Countries like Egypt with asset sales, Gulf deposits, and IMF deals are more appealing to investors. Their bonds have held up better recently.
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Ivory Coast and Senegal have alternatives like blended financing and are less exposed to dollar fluctuations. Their debt is outperforming.
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Overall dollar shortage is driving up costs of imports, fueling inflation, and pushing consumers to informal markets across Africa. Crisis risks remain for many countries.