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Author: James Oppong-Gyebi
Publisher:
ISBN: 9783346850898
Category :
Languages : en
Pages : 0
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Book Description
Master's Thesis from the year 2022 in the subject Economics - Case Scenarios, grade: 1.3, University of Siegen (Faculty 3), course: MSc Economic Policy, language: English, abstract: This study assesses the sustainability of public debt in Africa by estimating a fiscal reaction function using the feasible fixed effects generalized least squares estimator with panel data from 40 African countries and annual time series from 2001 to 2021. I find evidence in support of public debt sustainability in Africa, with low-debt African countries exerting a greater fiscal effort in maintaining sustainable debt levels than high-debt African countries. The research questions are: Is public debt in Africa sustainable? Has public debt sustainability in Africa been weaker following the global financial crisis? Which debt group has exerted a stronger fiscal effort toward maintaining sustainable public debt levels? Is Nigeria's public debt to GDP ratio unsustainable compared to Ghana, South Africa, Ethiopia, Algeria, Tunisia, and Egypt? The rising levels of public debt within the continent indicate the possibility of a debt crisis among African countries if not carefully managed. The latest Debt Sustainability Analysis (DSA) under the Debt Sustainability Framework (DSF) for Low-Income Countries (LIC) jointly published by the IMF and World Bank affirms this fear as 25 African countries are either already in or at high risk of debt distress. . The report further indicates that 13 other African countries are at moderate risk of debt distress. Thus, with memories of the recent Greek debt crisis still fresh in mind, African countries are presented with a scenario of the destructive impact of a debt crisis if not expertly handled. It is therefore of great importance that African countries display robust fiscal discipline and pursue sound policies so as not to be at the risk of debt distress. Given the evidence of rising public debt levels and the possibility of debt distress in several Afri
Author: James Oppong-Gyebi
Publisher:
ISBN: 9783346850898
Category :
Languages : en
Pages : 0
Get Book
Book Description
Master's Thesis from the year 2022 in the subject Economics - Case Scenarios, grade: 1.3, University of Siegen (Faculty 3), course: MSc Economic Policy, language: English, abstract: This study assesses the sustainability of public debt in Africa by estimating a fiscal reaction function using the feasible fixed effects generalized least squares estimator with panel data from 40 African countries and annual time series from 2001 to 2021. I find evidence in support of public debt sustainability in Africa, with low-debt African countries exerting a greater fiscal effort in maintaining sustainable debt levels than high-debt African countries. The research questions are: Is public debt in Africa sustainable? Has public debt sustainability in Africa been weaker following the global financial crisis? Which debt group has exerted a stronger fiscal effort toward maintaining sustainable public debt levels? Is Nigeria's public debt to GDP ratio unsustainable compared to Ghana, South Africa, Ethiopia, Algeria, Tunisia, and Egypt? The rising levels of public debt within the continent indicate the possibility of a debt crisis among African countries if not carefully managed. The latest Debt Sustainability Analysis (DSA) under the Debt Sustainability Framework (DSF) for Low-Income Countries (LIC) jointly published by the IMF and World Bank affirms this fear as 25 African countries are either already in or at high risk of debt distress. . The report further indicates that 13 other African countries are at moderate risk of debt distress. Thus, with memories of the recent Greek debt crisis still fresh in mind, African countries are presented with a scenario of the destructive impact of a debt crisis if not expertly handled. It is therefore of great importance that African countries display robust fiscal discipline and pursue sound policies so as not to be at the risk of debt distress. Given the evidence of rising public debt levels and the possibility of debt distress in several Afri
Author: Barry W. Poulson
Publisher: Rowman & Littlefield
ISBN: 1666902578
Category : Business & Economics
Languages : en
Pages : 389
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Book Description
As countries recover from the coronavirus pandemic, they are confronted with an even more challenging debt crisis. Xavier Debrun argues in the foreword that in deciding where we go from here that there is no longer a consensus regarding the optimum design and enforcement of fiscal rules. Rather we must address a series of questions and challenges to the conventional wisdom. This book provides an opportunity for scholars to explore these questions from an international perspective, with reference to European countries, and emerging nations as well as the United States.
Author: Zuzana Brixiova
Publisher:
ISBN:
Category :
Languages : en
Pages : 25
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Book Description
The heightened interest of African countries to access international capital markets has put public debt sustainability once again high on the continent's policy agenda. Applying the 'stabilizing primary balance approach' to sustainability shows that the primary balances exceeded those required to keep public debt at the 2007 level in about half of the countries studied. In several cases with higher debt burdens, the balances were also above those needed to reduce public debt-to-GDP to sustainable thresholds. However, in most countries the main driver of sustainability has been the interest rate - growth differential (IRGD), underscoring the importance of maintaining and even accelerating growth as well as utilizing the borrowing space for growth-enhancing outlays. Fiscal policies will need to play a greater role in maintaining debt sustainability in the future, especially since the IRGDs are likely to narrow over the longer term.
Author: Daniel Cohen
Publisher: World Bank Publications
ISBN:
Category :
Languages : en
Pages : 40
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Book Description
July 1996 The role of debt forgiveness is to alleviate what is known as debt overhang. This concept is the core idea of the Brady deals, and it now comes to the African debt crisis. How can one gauge the hypothesis of the debt overhang? To what extent can one attribute the growth slowdown of the 1990s to the debt crisis of the 1980s? Using data from the past decade, the author finds that debt variables play a significant role in that slowdown. In one exercise, he finds that more than half the growth slowdown of the large debtor countries in the 1980s could be attributed to the debt crisis. To what reasonable debt ratio should African debt be written down? Most exercises set the threshold of sustainability of debt at about 200 percent. The easiest way to rationalize such a threshold is first to measure the average value of debt-to-export ratios reached at the time of the first rescheduling of debt in a given country. Using Latin America as a benchmark, one finds an average threshold of 248 percent. However short-sighted such a ratio might be, it goes a long way toward rationalizing the view that a debt-to-export ratio between 200 and 300 percent is a strong signal of a forthcoming crisis. This naive approach takes no account of the changing environment (growth and interest rates) a country must confront. A more subtle approach should allow for the prospect of a country's growth to assess the sustainability of the debt it inherits. With the author's formula for so doing, Africa's debt-to-export ratio should be brought to 198 percent. Another way to assess the sustainability of debt is to look at the secondary market, which allows one to estimate the prospect of repayment expected by market participants. Few African debts are actually quoted on secondary markets, but the author presents a formula for reconstructing estimates of repayment prospects econometrically. By that method, Africa's debt-to-export ratio should be 210 percent, suggesting that a threshold between 200 and 250 percent is about right.
Author: Gregory Smith
Publisher: Oxford University Press
ISBN: 019764421X
Category : Business & Economics
Languages : en
Pages : 230
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Book Description
Borrowing is a crucial source of financing for governments all over the world. If they get it wrong, then debt crises can bring progress to a halt. But if it's done right, investment happens and conditions improve. African countries are seeking calmer capital, to raise living standards and give their economies a competitive edge. The African debt landscape has changed radically in the first two decades of the twenty-first century. Since the clean slate of extensive debt relief, states have sought new borrowing opportunities from international capital markets and emerging global powers like China. The new debt composition has increased risk, exacerbated by the 2020 coronavirus pandemic: richer countries borrowed at rock-bottom interest rates, while Africa faced an expensive jump in indebtedness. The escalating debt burden has provoked calls by the G20 for suspension of debt payments. But Africa's debt today is highly complex, and owed to a wider range of lenders. A new approach is needed, and could turn crisis into opportunity. Urgent action by both lenders and borrowers can reduce risk, while carefully preserving market access; and smart deployment of private finance can provide the scale of investment needed to achieve development goals and tackle the climate emergency.
Author: Mthuli Ncube
Publisher:
ISBN:
Category : Debts, Public
Languages : en
Pages : 29
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Book Description
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1451821115
Category : Business & Economics
Languages : en
Pages : 12
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Book Description
This report of the Debt Sustainability Analysis (DSA) indicates that the envisaged strategy of a partial substitution of domestic debt by increased inflows of external grants and concessional loans, as well as a rescheduling of external debt by the Paris and London Clubs, would facilitate the achievement of debt sustainability. The DSA also confirms that such a debt rescheduling could constitute an appropriate exit strategy for Kenya. The DSA also shows that debt sustainability would improve significantly with a concessional rescheduling, particularly under the Naples terms.
Author: Benno Ferrarini
Publisher: Routledge
ISBN: 0415522218
Category : Business & Economics
Languages : en
Pages : 227
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Book Description
Addressing the global financial crisis has required fiscal intervention on a substantial scale by governments around the world. The consequent buildup of public debt, in particular its sustainability, has moved to center stage in the policy debate. If the Asia and Pacific region is to continue to serve as an engine for global growth, its public debt must be sustainable. Public Debt Sustainability in Developing Asia addresses this issue for Asia and the Pacific as a whole as well as for three of the most dynamic economies in the region: the People’s Republic of China, India, and Viet Nam. The book begins with a discussion of the reasons for increased attention to debt-related issues. It also introduces fiscal indicators for the Asian Development. Bank’s developing member countries and economies. The sustainability of their debt is assessed through extant approaches and with the most up-to-date data sources. The book also surveys the existing literature on debt sustainability, outlining the main issues related to it, and discusses the key implications for the application of debt sustainability analysis in developing Asia. Also highlighted is the importance of conducting individual country studies in view of wide variations in definitions of public expenditure, revenues, contingent liabilities, government structures (e.g., federal), and the like, as well as the impact of debt on interest rates. The book further provides in-depth debt sustainability analyses for the People’s Republic of China, India, and Viet Nam. Public Debt Sustainability in Developing Asia offers a comprehensive analytical and empirical update on the sustainability of public debt in the region. It breaks new ground in examining characteristics that are crucial to understanding sustainability and offers richer policy analysis that should prove useful for policymakers, researchers, and graduate students.
Author: George Kararach
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Author: Ngozi Egbuna
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
"WAMZ countries have accumulated high levels of public debt less than two decades after the massive debt forgiveness effected under the Highly Indebted Poor Countries (HIPC) initiative. This has raised sustainability concerns as rising debt levels have the potential to create negative spillover effects and derail the macroeconomic convergence process in the Zone. This study examines the response of WAMZ countries to increases in public debt levels. Utilizing pooled OLS and panel fixed effects (FE) on annual data covering the period 2000 - 2018, the study shows positive response of primary balance to changes in the debt to output ratio across WAMZ countries, indicating that public debt were sustainable during the period. Results from the Panel Smooth Transition Regression (PSTR) model indicate significant positive non-linear response of primary balance to increases in the debt ratio below a threshold debt-to-GDP ratio of 90 percent. The study recommends the continuation of fiscal consolidation efforts aimed at enhancing revenue and rationalizing unproductive expenditures in all Member States"--Page 4.
