The Global Economic Governance (GEG) Africa programme is a policy research and stakeholder engagement programme to strengthen the influence of pro-poor African coalitions at global economic governance fora.
Monday, 26 November 2018 12:59

Managing Africa’s Rising Debt: Time for a Multi-Pronged Approach

Written by Adedeji Adeniran, Mma Amara Ekeruche, Samuel Bodurin, Abdelaaziz Ait Ale, Badr Mandri & Ghazi Tayeb
Managing Africa’s Rising Debt: Time for a Multi-Pronged Approach Image: Flickr, Adam Cohn

GEGAfrica Policy Briefing, November 2018

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GEGAfrica Theme 1

Debt sustainability in Africa has emerged as a key concern among policymakers and development finance institutions (DFIs). Currently, 19 out of 54 countries in Africa exceed the 60% debt-to-gross domestic product (GDP) threshold prescribed by the African Monetary Co-operation Programme (AMCP) and 24 countries have surpassed the 55% debt-to-GDP ratio suggested by the International Monetary Fund (IMF). Of concern is the changing structure of Africa’s debt: countries are tilting towards non-concessional and domestic debt with higher interest rates. Governments’ ease of access to and control over the domestic debt market is leading to excessive public debt accumulation and macroeconomic instability. Aside from the high interest rate and debt-servicing burden, excessive domestic debt also stifles credit to the private sector, the main engine of growth and job creation.

Authors: Adedeji Adeniran, Mma Amara Ekeruche, Samuel Bodurin, Abdelaaziz Ait Ale, Badr Mandri & Ghazi Tayeb

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