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 

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 Causal Relationship Between China-Africa Trade, China OFDI, and Economic Growth of African Countries

SAGE Open ◽  
2021 ◽  
Vol 11 (4) ◽  
pp. 215824402110648
Author(s):  
Emma Serwaa Obobisa ◽  
Haibo Chen ◽  
Emmanuel Caesar Ayamba ◽  
Claudia Nyarko Mensah
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
Negative Impact ◽  
Empirical Studies ◽  
Generalized Least Squares ◽  
Causal Link ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Middle Income ◽  
Sub Saharan

Recently, China has emerged as the largest trading partner and a significant source of investment in the African continent. Although there is consent on the increasing importance of China and Africa’s economic partnership, there are many controversies on how it affects African countries. Debates on China in Africa have, however, relied on grandiloquence rather than empirical studies. This study explores the causal link between China-Africa trade, China’s outward foreign direct (OFDI), and economic growth of 24 Sub-Saharan Africa countries from 1999 to 2018. The aggregated panel is classified into upper-middle-income, low-middle income, and low-income Sub-Saharan African countries. In the long run, key findings from the feasible generalized least squares (FGLS) estimator unveiled that; (i) China-Africa trade negatively contributes to economic growth among all panels. (ii) China’s OFDI improves economic growth in the low middle and low-income African countries whereas a significant negative liaison is evidenced in the upper-middle-income African countries. (iii) Labor force have a negative impact on economic growth whiles gross capital formation is evidenced to positively impact economic growth at all the panels. The Dumitrescu and Hurlin Granger causality unveiled a one-sided causal link from China-Africa trade to economic growth at all panels. The study proposes policy recommendations based on the results.

scholarly journals Does economic growth reduce childhood stunting? A multicountry analysis of 89 Demographic and Health Surveys in sub-Saharan Africa

2020 ◽  
Vol 5 (1) ◽  
pp. e002042 ◽  
Author(s):  
Sanni Yaya ◽  
Olalekan A Uthman ◽  
Michael Kunnuji ◽  
Kannan Navaneetham ◽  
Joshua O Akinyemi ◽  
...  
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
Random Effect ◽  
Sub Saharan Africa ◽  
Low Income Countries ◽  
Gdp Per Capita ◽  
Demographic And Health Surveys ◽  
Per Capita ◽  
Sub Saharan ◽  
Childhood Stunting

BackgroundThere is mixed evidence and lack of consensus on the impact of economic development on stunting, and likewise there is a dearth of empirical studies on this relationship in the case of sub-Saharan Africa. Thus, this paper examines whether economic growth is associated with childhood stunting in low-income and middle-income sub-Saharan African countries.MethodsWe analysed data from 89 Demographic and Health Surveys conducted between 1987 and 2016 available as of October 2018 using multivariable multilevel logistic regression models to show the association between gross domestic product (GDP) per capita and stunting. We adjusted the models for child’s age, survey year, child’s sex, birth order and country random effect, and presented adjusted and unadjusted ORs.ResultsWe included data from 490 526 children. We found that the prevalence of stunting decreased with increasing GDP per capita (correlation coefficient=−0.606, p<0.0001). In the unadjusted model for full sample, for every US$1000 increase in GDP per capita, the odds of stunting decreased by 23% (OR=0.77, 95% CI 0.76 to 0.78). The magnitude of the association between GDP per capita and stunting was stronger among children in the richest quintile. After adjustment was made, the association was not significant among children from the poorest quintile. However, the magnitude of the association was more pronounced among children from low-income countries, such that, in the model adjusted for child’s age, survey year, child’s sex, birth order and country random effect, the association between GDP per capita and stunting remained statistically significant; for every US$1000 increase in GDP per capita, the odds of stunting decreased by 12% (OR=0.88, 95% CI 0.87 to 0.90).ConclusionThere was no significant association between economic growth and child nutritional status. The prevalence of stunting decreased with increasing GDP per capita. This was more pronounced among children from the richest quintile. The magnitude of the association was higher among children from low-income countries, suggesting that households in the poorest quintile were typically the least likely to benefit from economic gains. The findings could serve as a building block needed to modify current policy as per child nutrition-related programmes in Africa.

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 Examining Export-Led Growth in Sub-Saharan Africa and China

2021 ◽  
Vol 10 (2) ◽  
Author(s):  
Joe Zimmerman ◽  
Brian Wheaton
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
Economic Transformation ◽  
Sub Saharan Africa ◽  
Net Exports ◽  
Accelerate Convergence ◽  
Sub Saharan ◽  
Level I ◽  
Developed Nations ◽  
The Relationship

Export-led growth is an economic hypothesis that links the level of a nation’s exports to economic growth in that country. Seen primarily as a model for low-income, developing nations to accelerate convergence as China began to do in the 1980s, the hypothesis theoretically still stands for developed nations. However, there exists significant discussion and doubt as to the strength and causality of the relationship between exports and growth, especially after a nation has industrialized and established itself as a major exporter. This paper examines and compares the effect of exports, imports, and net exports on economic growth for a set of low-income nations (Sub-Saharan Africa) and a country that has already undergone a significant economic transformation (China, at the provincial level). I regress the share of exports, imports, and net exports against GDP growth for Sub-Saharan African nations and Chinese provinces, and use instrumental variables to check for robustness. I find that while in Sub-Saharan Africa the share of exports and net exports exhibit a positive relationship with economic growth, higher shares of exports and net exports in China are associated with lower economic growth. This suggests that export-led growth is valid in Sub-Saharan Africa, but no longer is in China. I pose two potential explanations for this outcome in China: inefficient trade with low-income nations or decreasing trade with high-income nations. Regressions of China’s exports to these two types of economies over time indicate that the latter is the primary cause of the distinction in the effect of exports.

scholarly journals Government Expenditure and Economic Growth in Sub-Saharan Africa

2021 ◽  
Vol 7 (4) ◽  
pp. p14
Author(s):  
Dickson Wandeda ◽  
Wafula Masai ◽  
Samuel M. Nyandemo
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Low Income ◽  
Government Expenditure ◽  
Output Growth ◽  
Sub Saharan Africa ◽  
Middle Income ◽  
Sub Saharan ◽  
The Impact ◽  
Ssa Countries

The paper sought to investigate the effect government expenditure on economic growth in Sub-Saharan Africa using a panel data for 35 Sub-Saharan African countries for the period 2006-2018. The paper adopted dynamic panel data and estimates were achieved by using two-step system GMM while taking into account the problem of instrument proliferation. The paper provided evidence that education and health expenditure are key determinants of income growth for SSA. The impact of education spending on cross-country income variation is more effective in low income SSA countries than the middle income SSA countries. However, military expenditure on output growth is more effective in improving income level of middle income SSA countries than low income SSA countries. SSA countries should allocate more funding towards education sector and should also avail compulsory and free primary and secondary education. SSA should carry out health reforms which improve primary health and universal health insurance coverage.

scholarly journals The laffer curve and the debt-growth link in low-income Sub-Saharan African economies

2015 ◽  
Vol 42 (5) ◽  
pp. 878-892 ◽  
Author(s):  
Kelbesa Abdisa Megersa
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
Public Debt ◽  
Sub Saharan Africa ◽  
Low Income Countries ◽  
Positive Contribution ◽  
Content Type ◽  
Laffer Curve ◽  
Negative Effect ◽  
Sub Saharan

Purpose – The study of the link between debt and growth has been full of debates, both in theory and empirics. However, there is a growing consensus that the relationship is sensitive to the level of debt. The purpose of this paper is to address the question of non-linearity in the long-term relationship between public debt and economic growth. Specifically, the author set out to test if there exists an established “laffer curve” type relationship, where debt contributes to economic growth up to a certain point (maximal threshold) and then starts to have a negative effect on growth afterwards. Design/methodology/approach – To carry out the tests, the author has used a methodology that delivers a superior test of inverse U-shapes (Lind and Mehlum, 2010), in addition to the traditional test based on a regression with a quadratic specification. Findings – The results in the paper present evidence of a bell-shaped relationship between economic growth and total public debt in a panel of low-income Sub-Saharan African economies. This supports the hypothesis that debt has some positive contribution to economic growth in low-income countries, albeit up to a point. Practical implications – The overall result supports the claim that public debt may start to be a drag on economic growth if it goes on increasing beyond the level where it would be sustainable. Originality/value – This paper leads the way by implementing a robust test of non-linearity (“inverse-U” test) to the analyses the debt-growth nexus and the laffer curve in Sub-Saharan Africa.

scholarly journals Finance-growth nexus in sub-Saharan Africa

2021 ◽  
Vol 24 (1) ◽  
Author(s):  
Celsa M.D.C. Machado ◽  
António F.M.G. Saraiva ◽  
Paulo D.D. Vieira
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Low Income ◽  
Developed Countries ◽  
Dynamic Panel Data ◽  
Policy Implications ◽  
Sub Saharan Africa ◽  
Empirical Literature ◽  
African Countries ◽  
Sub Saharan

Background: There is now significant empirical literature suggesting that finance is good for growth only up to a threshold level of financial development, becoming harmful after that level, in developed and developing countries.Aim: This study extends this literature that investigates non-linearities on the finance-growth link, by testing the inverted U-shape hypothesis in sub-Saharan African countries, which are among the least developed ones.Setting: 36 countries from sub-Saharan Africa over the period 1980–2015.Method: Estimation of quadratic dynamic panel data models by system-generalised method of moments.Results: Empirical results show that there is a hump-shaped relationship between financial development and economic growth in sub-Saharan African countries.Conclusion: Results suggest that the hypothesis of ‘too much finance harms economic growth’ also holds for low-income and less developed countries, but for much lower threshold levels of financial development than those of more developed and higher-income countries. As for policy implications, measures to strengthen finance quality and other growth-enhancing strategies need to be undertaken, rather than increasing finance size.

Managing African Urbanization in the Context of Environmental Change

2014 ◽  
Vol 2 (2) ◽  
Author(s):  
Shuaib Lwasa
Keyword(s):  
Climate Change ◽  
Economic Growth ◽  
Social Services ◽  
Urban Areas ◽  
Urban Governance ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Sub Saharan ◽  
Urbanization Rate ◽  
Development And Management

Africa’s urbanization rate has increased steadily over the past three decades and is reported to be faster than in any other region in the world . It is estimated that by 2030, over half of the African population will be living in urban areas . But the nature of Africa’s urbanization and subsequent form of cities is yet to be critically analyzed in the context of city authorities’ readiness to address the challenges . Evidence is also suggesting that urbanization in African countries is increasingly associated with the high economic growth that has been observed in the last two decades . Both underlying and proximate drivers are responsible for the urbanization, and these include population dynamics, economic growth, legislative designation, increasing densities in rural centers, as well as the growth of mega cities such as Lagos, Cairo and Kinshasa, that are extending to form urban corridors . With the opportunities of urbanization in Sub–Saharan Africa, there are also challenges in the development and management of these cities . Those challenges include provision of social services, sustainable economic development, housing development, urban governance, spatial development guidance and environmental management, climate change adaptation, mitigation and disaster risk reduction . The challenge involves dealing with the development and infrastructure deficit, in addition to required adaption to and mitigation of climate change . This paper examines the current state of urban management in Africa .

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