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African Countries’ Debt: A Tale of Acceleration at Multiple Speeds and Shades
[Total Public Debt and Growth in Developing Countries]

Author

Listed:
  • Vera Songwe
  • Christine Awiti

Abstract

Over 50% of African countries had debt to GDP ratios above 50% in 2019 with at least 48% of countries having debt to GDP ratios above 70%. The rise in debt levels is a recent phenomenon, with most countries’ debt increasing between 2014 and 2019. In this paper, we propose a new approach to debt monitoring. We argue that the speed of debt accumulation matters and that monitoring the speed of debt could alter the path of debt to more sustainable debt levels. We carry out an empirical analysis for all African countries in the 10 years to 2018 and group countries into seven categories based on their speed of growth of debt and their debt levels. We find that there is heterogeneity in country debt acquisition and that ensuing policies to ensure sustainable debt will need to be country specific.

Suggested Citation

  • Vera Songwe & Christine Awiti, 2021. "African Countries’ Debt: A Tale of Acceleration at Multiple Speeds and Shades [Total Public Debt and Growth in Developing Countries]," Journal of African Economies, Centre for the Study of African Economies, vol. 30(Supplemen), pages 14-32.
    • Handle: RePEc:oup:jafrec:v:30:y:2021:i:supplement_1:p:i14-i32.
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    File URL: http://hdl.handle.net/10.1093/jae/ejab020
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    References listed on IDEAS

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    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2015. "Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 2(4), pages 5-17, June.
    2. Reinhart, Carmen & Trebesch, Christoph, 2014. "A Distant Mirror of Debt, Default, and Relief," CEPR Discussion Papers 10195, C.E.P.R. Discussion Papers.
    3. Carmen M. Reinhart & Christoph Trebesch, 2016. "Sovereign Debt Relief and Its Aftermath," Journal of the European Economic Association, European Economic Association, vol. 14(1), pages 215-251.
    4. Mr. Philip Barrett, 2018. "Interest-Growth Differentials and Debt Limits in Advanced Economies," IMF Working Papers 2018/082, International Monetary Fund.
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    More about this item

    Keywords

    deficit; debt; debt sustainability; JEL Classification: H62; H63; H68;
    All these keywords.

    JEL classification:

    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt

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