External Debt, Growth and Debt-Service Capacity in Sub-Saharan Africa: A Theoretical and Empirical Analysis

1994 ◽  
Vol 38 (1) ◽  
pp. 47-52 ◽  
Author(s):  
Gerald Scott
Keyword(s):  
Theoretical Model ◽  
Production Function ◽  
Low Income ◽  
External Debt ◽  
Debt Service ◽  
Sub Saharan Africa ◽  
Service Capacity ◽  
Empirical Estimates ◽  
Marginal Propensity ◽  
Sub Saharan

First the paper uses a simple neoclassical production function to show how capital imports can increase output in a low income nation. Secondly the paper shows how the increased output resulting from capital imports can potentially be distributed between debt service payments and consumption. Thirdly the paper uses data from 1980–87 for 31 countries in SSA, to provide empirical estimates of the elasticity of output with respect to capital imports, and the elasticity of the surplus with respect to output. The theoretical model suggests that the actual surplus available for debt service may be much smaller than that suggested by the productivity of capital imports alone. The empirical estimates for SSA indicate that although capital imports into SSA have been very unproductive the marginal propensity to save seems sufficient to permit the region to generate a surplus for debt service.

scholarly journals The Dynamic Impact of Public External Debt on Capital Formation in Sub-Saharan Africa: The Pooled Mean Group Approach

2021 ◽  
Vol 3 (4) ◽  
pp. 144-157
Author(s):  
Chukwunenye N Kocha ◽  
Marshal Iwedi ◽  
James Sarakiri
Keyword(s):  
External Debt ◽  
Capital Formation ◽  
Debt Service ◽  
Sub Saharan Africa ◽  
Interest Payment ◽  
Debt Sustainability ◽  
Pooled Mean Group ◽  
Long Run ◽  
Short Run ◽  
Sub Saharan

The increasing reliance on public external debt stocks in Africa and other developing countries has raised the question of debt sustainability, especially in the face of Covid-19, which has forced many counties (both developed and developing) into an unforeseen and unplanned recession. This study contributes to the literature on debt sustainability by examining the effect of public debt on capital formation in Sub-Saharan Africa (SSA) from 2000 to 2008 using the pooled mean group estimation approach. The debt variables considered are external debt stock, debt service on external debt, and interest payment on external debt. Consistent with the overhang theory, our results show that increasing external debt stock and interest payment on external debts only have a marginal impact on capital formation in the short run and exerts a serious negative effect in the long run. Our results also show that debt service burden has a positive effect on gross fixed capital formation in the long run. Therefore, we argue that despite being faced with a huge debt service burden resulting from large external debt stock, SSA countries are not neglecting investments in critical infrastructures needed to drive economic growth. However, we recommend that increasing government revenue base, minimizing economic waste associated with public expenditure, and intensifying negotiations for debt relief may be a plausible way out.

scholarly journals The Foreign Debt Problem of Africa

Afrika Focus ◽  
1987 ◽  
Vol 3 (1-2) ◽  
pp. 1-30
Author(s):  
Patrick Decoodt
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
Debt Crisis ◽  
Foreign Debt ◽  
Economic Problem ◽  
Debt Service ◽  
Sub Saharan Africa ◽  
Debt Problem ◽  
Single Solution ◽  
Sub Saharan

The foreign debt problem of Sub Saharan Africa {SSA), although an important obstacle against economic growth, is not the region's major economic problem. The creditors are less concerned about the relative small debt figures of SSA because of the lower risks for the equilibrium of the financial system. But from the debtors' viewpoint, the debt situation is possibly even more critical in low-income Africa than in the richer major debtor countries. SSA has a predominance of official creditors with the best obtainable credit terms. Notwithstanding these good terms, SSA is so poor that it has difficulties with fulfilling its debt service. There is no single solution for the African debt crisis. Anyway the official creditors have to adopt a more flexible attitude. The debtor countries have also to accept their own responsibility in the solutions of the problem.

scholarly journals The foreign Debt Problem in Africa

Afrika Focus ◽  
1987 ◽  
Vol 3 (1-2) ◽  
Author(s):  
Patrick Decoodt
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
Debt Crisis ◽  
Foreign Debt ◽  
Economic Problem ◽  
Debt Service ◽  
Sub Saharan Africa ◽  
Debt Problem ◽  
Single Solution ◽  
Sub Saharan

The foreign debt problem of Sub-Saharan Africa (SSA), although an important obstacle against economic growth, is not the region's major economic problem. The creditors are less concerned about the relative small debt figures of SSA because of the lower risks for the equilibrium of the financial system. But from the debtors' viewpoint, the debt situation is possibly even more critical in low-income Africa than in the richer major debtor countries. SSA has a predominance of official creditors with the best obtainable credit terms. Notwithstanding these good terms, SSA is so poor that it has difficulties with fulfilling its debt service. There is no single solution for the African debt crisis. Anyway the official creditors have to adopt a more flexible attitude. The debtor countries have also to accept their own responsibility in the solutions of the problem. KEYWORDS: foreign debt problem, Sub-Saharan Africa 

Monetary Policy in Sub-Saharan Africa

2018 ◽  
Keyword(s):  
Monetary Policy ◽  
Low Income ◽  
Sub Saharan Africa ◽  
Low Income Countries ◽  
African Countries ◽  
Policy Regimes ◽  
Export Prices ◽  
Policy Work ◽  
Sub Saharan ◽  
Policy Guidance

Having broadly stabilized inflation over the past two decades, many policymakers in sub-Saharan Africa are now asking more of their monetary policy frameworks. They are looking to avoid policy misalignments and respond appropriately to both domestic and external shocks, including swings in fiscal policy and spikes in food and export prices. In many cases they are finding current regimes—often characterized as ‘money targeting’—lacking, with opaque and sometimes inconsistent objectives, inadequate transmission of policy to the economy, and difficulties in responding to supply shocks. At the same time, little existing research on monetary policy is targeted to low-income countries. What do we know about the empirics of monetary transmission in low-income countries? (How) Does monetary policy work in countries characterized by a huge share of food in consumption, underdeveloped financial markets, and opaque policy regimes? (How) Can we use methods largely derived in advanced countries to answer these questions? And (how) can we use the results to guide policymakers? This book draws on years of research and practice at the IMF and in central banks from the region to shed empirical and theoretical light on these questions and to provide practical tools and policy guidance. A key feature of the book is the application of dynamic general equilibrium models, suitably adapted to reflect key features of low-income countries, for the analysis of monetary policy in sub-Saharan African countries.

scholarly journals COVID-19 pandemic: the implications of the natural history, challenges of diagnosis and management for care in sub-Saharan Africa

2021 ◽  
Vol 10 (1) ◽  
Author(s):  
Lawrence Omo-Aghoja ◽  
Emuesiri Goodies Moke ◽  
Kenneth Kelechi Anachuna ◽  
Adrian Itivere Omogbiya ◽  
Emuesiri Kohworho Umukoro ◽  
...  
Keyword(s):  
Public Health ◽  
Natural History ◽  
Low Income ◽  
Sub Saharan Africa ◽  
Low Income Countries ◽  
Diagnosis And Management ◽  
Severe Acute Respiratory Infection ◽  
Identification Technique ◽  
Sub Saharan ◽  
Policies And Programs

Abstract Background Coronavirus disease (COVID-19) is a severe acute respiratory infection which has afflicted virtually almost all nations of the earth. It is highly transmissible and represents one of the most serious pandemics in recent times, with the capacity to overwhelm any healthcare system and cause morbidity and fatality. Main content The diagnosis of this disease is daunting and challenging as it is dependent on emerging clinical symptomatology that continues to increase and change very rapidly. The definitive test is the very expensive and scarce polymerase chain reaction (PCR) viral identification technique. The management has remained largely supportive and empirical, as there are no officially approved therapeutic agents, vaccines or antiviral medications for the management of the disease. Severe cases often require intensive care facilities and personnel. Yet there is paucity of facilities including the personnel required for diagnosis and treatment of COVID-19 in sub-Saharan Africa (SSA). It is against this backdrop that a review of key published reports on the pandemic in SSA and globally is made, as understanding the natural history of a disease and the documented responses to diagnosis and management is usually a key public health strategy for designing and improving as appropriate, relevant interventions. Lead findings were that responses by most nations of SSA were adhoc, paucity of public health awareness strategies and absence of legislations that would help enforce preventive measures, as well as limited facilities (including personal protective equipment) and institutional capacities to deliver needed interventions. Conclusion COVID-19 is real and has overwhelmed global health care system especially low-income countries of the sub-Sahara such as Nigeria. Suggestions for improvement of healthcare policies and programs to contain the current pandemic and to respond more optimally in case of future pandemics are made herein.

scholarly journals Gestational weight gain in low-income and middle-income countries: a modelling analysis using nationally representative data

2020 ◽  
Vol 5 (11) ◽  
pp. e003423
Author(s):  
Dongqing Wang ◽  
Molin Wang ◽  
Anne Marie Darling ◽  
Nandita Perumal ◽  
Enju Liu ◽  
...  
Keyword(s):  
Weight Gain ◽  
North Africa ◽  
Low Income ◽  
Sub Saharan Africa ◽  
Middle Income ◽  
Middle Income Countries ◽  
Gestational Weight ◽  
Latin America And Caribbean ◽  
Nationally Representative ◽  
Sub Saharan

IntroductionGestational weight gain (GWG) has important implications for maternal and child health and is an ideal modifiable factor for preconceptional and antenatal care. However, the average levels of GWG across all low-income and middle-income countries of the world have not been characterised using nationally representative data.MethodsGWG estimates across time were computed using data from the Demographic and Health Surveys Program. A hierarchical model was developed to estimate the mean total GWG in the year 2015 for all countries to facilitate cross-country comparison. Year and country-level covariates were used as predictors, and variable selection was guided by the model fit. The final model included year (restricted cubic splines), geographical super-region (as defined by the Global Burden of Disease Study), mean adult female body mass index, gross domestic product per capita and total fertility rate. Uncertainty ranges (URs) were generated using non-parametric bootstrapping and a multiple imputation approach. Estimates were also computed for each super-region and region.ResultsLatin America and Caribbean (11.80 kg (95% UR: 6.18, 17.41)) and Central Europe, Eastern Europe and Central Asia (11.19 kg (95% UR: 6.16, 16.21)) were the super-regions with the highest GWG estimates in 2015. Sub-Saharan Africa (6.64 kg (95% UR: 3.39, 9.88)) and North Africa and Middle East (6.80 kg (95% UR: 3.17, 10.43)) were the super-regions with the lowest estimates in 2015. With the exception of Latin America and Caribbean, all super-regions were below the minimum GWG recommendation for normal-weight women, with Sub-Saharan Africa and North Africa and Middle East estimated to meet less than 60% of the minimum recommendation.ConclusionThe levels of GWG are inadequate in most low-income and middle-income countries and regions. Longitudinal monitoring systems and population-based interventions are crucial to combat inadequate GWG in low-income and middle-income countries.

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