Global Liquidity, the Private Sector and Debt Sustainability in Sub‐Saharan Africa. Issue 5 (9th May 2019)

• Record Type: Journal Article
• Authors: Bonizzi, Bruno; Laskaridis, Christina; Toporowski, Jan
• Is Part Of: Development and change. Volume 50:Issue 5(2019)
• Page Start: 1430
• Page End: 1454
• Publication Date: 2019-05-09
• Subjects: Social sciences -- Periodicals; Economic development -- Periodicals; Social change -- Periodicals; Developing countries -- Periodicals; 303.483
• DOI: 10.1111/dech.12507
• Languages: English
• ISSNs: 0012-155X

Abstract

ABSTRACT: This article analyses the effect of changes in international financial markets on the debt dynamics in sub‐Saharan Africa in recent years. A key development is the rise of the private sector as both a lender and a borrower in African debt markets, a process that is associated with the growing integration of the region into global financial markets. The article argues that the Debt Sustainability Framework of the International Monetary Fund and World Bank has taken some steps to account for this growth of private sector, cross‐border debt, but such steps still fall short of what is needed. A full appreciation of the importance of private debt implies, first, that debt sustainability in sub‐Saharan Africa be understood in the context of countries' integration in global financial markets and the global liquidity cycles that characterize those markets and, second, that the interplay between private and public debt be monitored in order to provide a fuller picture of the impact of private sector debt on fiscal sustainability.