Governance and Debt Accumulation in Africa

Augustin Fosu () and Dede Gafa
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Dede Gafa: African School of Economics (ASE), Benin

No 202338, Working Papers from University of Pretoria, Department of Economics

Abstract: This paper discusses the state of Africa's public debt within the global context. It then examines the importance of governance in explaining the debt accumulation in the region. Overall, sovereign debt levels have rapidly increased in the region over the past decade, especially following debt forgiveness under the Multilateral Debt Relief Initiative (MDRI) in the mid-2000s, with a shift of the structure towards less concessional and more non-conventional financing modalities. The study further finds that weaker governance and institutions have been associated with higher debt levels over the period. Hence, improvements in governance would be essential not only for enhancing growth but also for reducing debt levels.

Pages: 27 pages
Date: 2023-12
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Persistent link: https://EconPapers.repec.org/RePEc:pre:wpaper:202338

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