Debt Sustainability in Sub-Saharan Africa: Unraveling Country-Specific Risks
Bill Battaile,
F. Leonardo Hernández and
Vivian Norambuena
Working Papers from University of Chile, Department of Economics
Abstract:
Sub-Saharan African countries as a group showed a considerable reduction in public and externalindebtedness in the early 2000s as a result of debt relief programs, higher economic growth and improved fiscal management for some countries. More recently, however, vulnerabilities in some countries are on the rise, including a few with very rapid debt accumulation. This paper looks at the heterogeneous experiences across Sub-Saharan African countries and the detailed dynamics that have driven changes in public debt since the global financial crisis. Borrowing to support fiscal deficits since 2009, including through domestic markets and Eurobond issuance, has driven a net increase in public debt for all countries except oil exporters benefitting from buoyant commodity prices and fragile states receiving post-2008 HIPC relief. Current account deficits and FDI inflows drove the external debt dynamics, with high balance of payments problems associated with very rapid external debt accumulation in some cases. Pockets of increasing vulnerabilities of debt financing profiles and sensitivity of debt burden indicators to macro-fiscal shocks require close monitoring. Specific risks that policy-makers in Sub-Saharan Africa need to pay attention to going forward include the recent fall in oil prices, the slowdown in China and the sluggish recovery in Europe, dependence on non-debt creating flows and accounting for contingent liabilities.
Pages: 36 pages
Date: 2015-11
New Economics Papers: this item is included in nep-afr and nep-mac
References: View complete reference list from CitEc
Citations: View citations in EconPapers (7)
Downloads: (external link)
http://www.econ.uchile.cl/uploads/publicacion/f159 ... 2092efb1cf9ddf2c.pdf
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:udc:wpaper:wp413
Access Statistics for this paper
More papers in Working Papers from University of Chile, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Mohit Karnani ().