Fiscal policy sustainability and public debt in Africa

Anselm Komla Abotsi ()
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Anselm Komla Abotsi: University of Education

SN Business & Economics, 2024, vol. 4, issue 1, 1-18

Abstract: Abstract The current rising levels of public debt among African countries require that African governments understand how the short- and medium-term sustainability of fiscal policy influences public debt accumulation. This study, therefore, tries to find out how cross‐country sustainability of fiscal policy has affected the accumulation of public debt among African countries. Secondary panel data spanning from 1996 to 2022 for 36 countries in Africa were used in this study. Using the system generalized method of moments estimating technique, while controlling for other variables, the study finds that the implementation of the short- and medium-term sustainable fiscal policy will result in a substantial reduction of public debt among African countries. It is recommended that governments formulate and implement sound, relevant, and sustainable fiscal policies to prevent excessive public debt accumulation in their various countries. Specifically, governments are encouraged to formulate prudent policies to manage the primary balance very well to ensure the sustainability of the public finances.

Keywords: Fiscal policy sustainability; Public debt; CPIA fiscal policy index; Government revenue; Government expenditure (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s43546-023-00601-6

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