Public Debt Sustainability in Africa: Building Resilience and Challenges Ahead
Mthuli Ncube () and
Zuzana Brixiov?? ()
Authors registered in the RePEc Author Service: Zuzana Brixiová ()
No wp1053, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan
The heightened interest of African countries to access international capital markets has put public debt sustainability once again high on the continent???s policy agenda. Applying the ???stabilizing primary balance approach??? to sustainability shows that the primary balances exceeded those required to keep public debt at the 2007 level in about half of the countries studied. In several cases with higher debt burdens, the balances were also above those needed to reduce public debt-to-GDP to sustainable thresholds. However, in most countries the main driver of sustainability has been the interest rate ??? growth differential (IRGD), underscoring the importance of maintaining and even accelerating growth as well as utilizing the borrowing space for growth-enhancing outlays. Fiscal policies will need to play a greater role in maintaining debt sustainability in the future, especially since the IRGDs are likely to narrow over the longer term.
Keywords: public debt; sovereign bonds; interest-growth differential; primary balance; Africa (search for similar items in EconPapers)
JEL-codes: H6 E6 O23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr and nep-dev
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Journal Article: Public Debt Sustainability in Africa: Building Resilience and Challenges Ahead (2015)
Working Paper: Public Debt Sustainability in Africa: Building Resilience and Challenges Ahead (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:wdi:papers:2013-1053
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