Publications /
Policy Brief

Back
Download PDF
Debt Sustainability and Development Financing in Sub- Saharan Africa: Recent Dynamics
Authors
Badr Mandri
Lotfi El Jai
September 18, 2019
Related topics: 

Countries in Sub-Saharan Africa (SSA) currently face a yearly infrastructure financing gap ranging between $68-$108 billion along with other socio-economic challenges (AfDB, 2019). Debt financing remains a major source of growth as countries in the region work to achieve their developmental needs and the Sustainable Development Goals (SDGs). The levels of official development aid (ODA) and foreign direct investments (FDIs) remain volatile to fully meet the region financial needs. However, the sustainability of SSA external debt raises serious concerns if one looks at the rapid debt accumulation in recent years. This brief will highlight the recent changes in the nature and quality of debt in SSA along with details of the risks related to the shift in the creditors base. Finally, this brief aims to demonstrate the impact of these risks on debt sustainability and the future of development financing in SSA.

In the early part of the 21st century, debt sustainability challenged Sub-Saharan Africa (SSA) as it sought to reach the Millennium Development Goals (MDGs). Following two episodes of debt relief (HIPC and MDRI2), the average debt-to-GDP ratio has decreased from over 100% in 2000 to less than 40% in 2010 (figure 1), representing a debt stock reduction of almost $100 billion (IMF, 2017). This was a breath of fresh air that would have allowed SSA countries to sustain their current and future debt levels and promote development expenditures in the region.

However, with the stagnation in the level of official development aid following the Global Financial Crisis of 2007, and the difficulties of the region’s countries in mobilizing domestic resources to finance their infrastructure and socio-economic development needs

RELATED CONTENT

  • Download PDF
    Le sommet de l’OTAN à Varsovie : clair-obscur du retour à l’endiguement
    Authors
    Rachid El Houdaigui
    October 7, 2016
    La réunion des chefs d’État et de gouvernement des pays de l’OTAN à Varsovie constitue une étape importante de la transformation structurelle et fonctionnelle de l’Alliance atlantique et de l’OTAN. Le Communiqué final et les trois déclarations confirment le retour progressif à l’endiguement, à travers le renforcement de la dissuasion et la défense de l’Alliance, et la mise à distance de la menace asymétrique et hybride. Cette dynamique contribue à la centralité de la défense collect ...
  • Brazil Needs an Honest Waste Loss
    Authors
    Otaviano Canuto
    October 4, 2016
    Brazil has been suffering from anemic productivity growth. This is a major challenge because in the long run, sustained productivity increases are necessary to underpin inclusive economic growth. Without them, increases in real labor earnings tend to conflict with global competitiveness; collecting taxes in order to fund government expenditures on infrastructure and social policies becomes a heavy burden; returns to private investment becomes harder to achieve; and ultimately citize ...
  • Download PDF
    Le défi de la transformation économique structurelle : une analyse par la complexité économique
    Authors
    Karim EL Mokri
    September 29, 2016
    L’objectif de ce travail est d’aborder la problématique de la transformation structurelle à travers une analyse par le concept de la complexité économique de Hausmann et Hidalgo, en se focalisant davantage sur les pays à revenu intermédiaire. Dans un premier temps, des régressions en données de panel utilisant la méthode des GMM en système, afin d’éviter les problèmes d’endogeneité, ont permis de mettre en évidence un lien empirique positif et significatif entre la complexité économ ...
  • Turkey’s Economy at the Crossroads
    Authors
    Otaviano Canuto
    Samuel George
    September 27, 2016
    On July 15, Turkey’s tumultuous 2016 took a shocking twist as elements within the country’s military attempted a coup against the government of President Recep Tayyip Erdogan. The putsch rapidly snapped at the seams, and a night that began with soldiers blocking bridges yielded a morning with those same soldiers flogged by civilians in the street. In the days following the attempt, Erdogan declared a three-month state of emergency and began purges of depth and breadth that extended ...
  • TTIP and its Effect on Southern Atlantic Countries
    Peter Chase 
    September 22, 2016
    This podcast is performed by Peter Chase. On June 17, 2013, the United States and the European Union formally announced the start of negotiations on a Transatlantic Trade and Investment P ...
  • Download PDF
    The New EU Global Strategy and What It Means for Morocco
    Authors
    Emiliano Alessandri
    September 19, 2016
    This policy brief reviews the recently published EU Global Strategy, highlighting its main strengths and weaknesses as well as innovations, starting with the concept of resilience. It argues that the document has many strengths for being a compromise text written at a time of deep uncertainty about the EU's own future. The brief also comments on the future of EU-Morocco relations in the new framework. It notes that the strategy perhaps missed an opportunity to reaffirm European-Moro ...
  • Post-Brexit transition: implications on UK-Africa relations
    Jonathan Eyal and Malcolm Chalmers 
    September 15, 2016
    A significant degree of uncertainty remains on the consequences of Britain’s EU referendum. Once Article 50 is triggered, the Brexit will still have to be enforced and effective. British ...
  • Download PDF
    The Road to Marrakech: Key Issues for COP22
    Authors
    Laura El-Katiri
    September 7, 2016
    Climate change is an increasingly integral part of our reality. Over the coming decades, global warming will affect our socio-economic development, human health, our availability of food, water along with our ecosystems and wildlife, more than we are likely able to imagine. The Paris Agreement, adopted last year in December at 21st session of Conference of the Parties (COP 21) by 196 parties (195 countries and the European Union) to the UN Framework Convention on Climate Change (UNF ...
  • L'émergence en question
    Moubarack Lo
    September 07, 2016
    Ce podcast est délivré par Moubarack Lo. Cette présentation a pour objet de définir une théorie de l’émergence économique, qui constitue une étape vers la convergence avec les pays dévelo ...