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12. Looming Debt Crisis in Sub-Saharan Africa: Drivers, Implications and Policy Options
- Author:
- Léonce Ndikumana, Theresa Mannah-Blankson, and Angelica Espiritu-Njuguna
- Publication Date:
- 11-2020
- Content Type:
- Working Paper
- Institution:
- Political Economy Research Institute (PERI), University of Massachusetts Amherst
- Abstract:
- This study explores the trends, patterns and drivers of recent debt accumulation in Sub-Saharan African countries with a view to sheding light on possible strategies to minimize adverse effects on the economies and ensure sustainable development financing. This is in light of concerns about a possible ‘looming debt crisis’ in the developing world, which have been exacerbated by the Covid-19 pandemic. The analysis in this study is based on existing data, supplemented by detailed information obtained from government sources for the cases of Ghana, Kenya, and Uganda. The evidence shows that Sub-Saharan African countries have experienced rapid accumulation of both domestic and external public debt since the 2008 global financial crisis. Governments have resorted increasingly to non-concessional borrowing and high-cost private short-term loans including Eurobonds, which has contributed to increasing the overall cost of debt servicing. The debt sustainability analysis by the IMF/World Bank completed before the Coronavirus pandemic suggested that debt ratios in SSA would stabilize or decline by 2023, assuming that appropriate fiscal consolidation plans are implemented and that most drivers of the debt acceleration dissipate in the medium term. With the Covid-19 pandemic, debt ratios in SSA are likely to rise and would only stabilize at a much later period if African economies are hit with a full-blown crisis as witnessed by advanced economies. Most importantly, the coronavirus crisis will exacerbate debt distress in countries that were already in weak conditions. It is imperative for Africa’s creditors and the donor community in general to assist African countries in combatting the pandemic and minimizing its impact on the economies by alleviating the debt burden through an expanded debt relief and a robust debt restructuring program. Going forward, given that African countries need high levels of financing to reach sustainable development goals, they must devise a strategy for ‘growing with debt’ in the post-crisis period. The paper offers some suggestions to achieve this goal.
- Topic:
- Debt, Political Economy, COVID-19, and Economic Crisis
- Political Geography:
- Africa and Sub-Saharan Africa
13. The Pandemic as an Impulse for the Development of New Technologies in Sub-Saharan Africa
- Author:
- Jędrzej Czerep
- Publication Date:
- 07-2020
- Content Type:
- Special Report
- Institution:
- The Polish Institute of International Affairs
- Abstract:
- A deep recession is projected for Sub-Saharan Africa in 2020 as a result of the COVID-19 pandemic. However, the market for new technologies providing solutions helpful during the health crisis, is developing dynamically. In the medium term, the research and development sector will gain importance and become attractive for investments, also for Polish companies.
- Topic:
- Development, Science and Technology, Research, Business, COVID-19, and Health Crisis
- Political Geography:
- Africa, Poland, and Sub-Saharan Africa