Public Debt Sustainability in Africa: Building Resilience and Challenges Ahead. (17th July 2015)

• Record Type: Journal Article
• Authors: Ncube, Mthuli; Brixiová, Zuzana
• Is Part Of: Development policy review. Volume 33:Number 5(2015:Sep.)
• Page Start: 555
• Page End: 580
• Publication Date: 2015-07-17
• Subjects: Developing countries -- Economic policy -- Periodicals; Economic assistance -- Developing countries -- Periodicals; Technical assistance -- Developing countries -- Periodicals; 338.91
• DOI: 10.1111/dpr.12126
• Languages: English
• ISSNs: 0950-6764

Abstract

<abstract abstract-type="main" id="dpr12126-abs-0001"> <title> <x xml:space="preserve">Abstract</x> </title> <p>The increased access of African countries to international capital markets has put public debt sustainability at the forefront of the continent's policy agenda. Utilising the 'stabilising primary‐balance' approach, this article finds that the actual primary balances exceeded those required to keep public debt at the 2007 level in about half the countries studied, and in several cases, those needed to reduce public debt‐to‐GDP to sustainable thresholds. The interest rate‐growth differential (IRGD) drove sustainability, underscoring the importance of growth and borrowing for growth‐enhancing outlays. As the IRGDs are likely to narrow over the longer term, fiscal policies will need to play a greater role.</p> </abstract>