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Debt Sustainability in Sub-Saharan Africa : Unraveling Country-Specific Risks

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World Bank (WB)

Abstract: Sub-Saharan African countries as a group showed a considerable reduction in public and external indebtedness in the early 2000s as a result of debt relief programs, higher economic growth, and improved fiscal management for some countries. More recently, however, vulnerabilities in some countries are on the rise, including a few with very rapid debt accumulation. This paper looks at the heterogeneous experiences across Sub-Saharan African countries and the detailed dynamics that have driven changes in public debt since the global financial crisis. Borrowing to support fiscal deficits since 2009, including through domestic markets and Eurobond issuance, has driven a net increase in public debt for all countries except oil exporters benefitting from buoyant commodity prices and fragile states receiving post-2008 Highly Indebted Poor Country relief. Current account deficits and foreign direct investment inflows drove the external debt dynamics, with balance of payments problems associated with very rapid external debt accumulation in some cases. Pockets of increasing vulnerabilities of debt financing profiles and sensitivity of debt burden indicators to macro-fiscal shocks require close monitoring. Specific risks that policy makers in Sub-Saharan Africa need to pay attention to going forward include the recent fall in commodity prices, especially oil, the slowdown in China and the sluggish recovery in Europe, dependence on non-debt-creating flows, and accounting for contingent liabilities.
Type: Working Paper
Publications & Research :: Policy Research Working Paper
Publications & Research
Link: http://hdl.handle.net/10986/23622
Subject: CONTINGENT LIABILITIES
DEFICIT
DEBT ACCUMULATION
CAPITAL MARKETS
DEBT SUSTAINABILITY ANALYSES
BASIS POINTS
GOVERNMENT EXPENDITURES
OIL PRICE
ACCOUNTING
REPAYMENT CAPACITY
TERMS OF DEBT
REAL INTEREST RATES
VALUATION
FISCAL DEFICITS
INTEREST
GOVERNMENT DEFICIT
DEBT CRISIS
INTEREST RATE
REMITTANCE
GOVERNMENT REVENUES
DEBT BUILDUP
EXCHANGE
BALANCE OF PAYMENTS
LIQUIDITY
ACCOUNTING FRAMEWORK
REAL INTEREST
TOTAL DEBT
EXPORTERS
REVENUES
WARRANTS
DEBT OVERHANG
DEBT DATA
DEBT SITUATIONS
CURRENT ACCOUNT SURPLUSES
EXTERNAL DEBT STOCKS
INTERNATIONAL BANK
INFLATION
DEBT BURDENS
CREDITORS
DEBT BURDEN
DEBT ANALYSES
EXTERNAL DEBT SERVICING
MATURITY
EXTERNAL FINANCE
EXTERNAL DEBT BURDEN
OIL PRICES
INITIAL DEBT
COMMERCIAL CREDITORS
INDEBTEDNESS
FORGIVENESS
CURRENCY
EVOLUTION OF DEBT
EXCHANGE RATE MOVEMENTS
EXTERNAL DEBT ACCUMULATION
CURRENT ACCOUNT
CONTRACTS
FINANCES
BOND ISSUANCE
INTERNATIONAL BOND
INTEREST RATES
TOTAL EXTERNAL DEBT
SOVEREIGN BOND
EXTERNAL INDEBTEDNESS
MARKETS
DEBT
EXTERNAL OBLIGATIONS
RETURN
DEFICITS
MULTILATERAL DEBT
DOMESTIC DEBT
LOANS
DIRECT INVESTMENT
REAL INTEREST RATE
BORROWING COSTS
GROSS DOMESTIC PRODUCT
DEBT SERVICE
FINANCE
CURRENT ACCOUNT DEFICITS
DEBT LEVELS
DEBT RATIO
DEBT SUSTAINABILITY ANALYSIS
INTEREST PAYMENTS
DEBT REDUCTION
EXTERNAL DEBT SERVICE
COUNTRY DEBT
COUNTRY RISK
DEBT PORTFOLIO
FINANCIAL CRISIS
LIQUIDITY RATIOS
FUTURE
DOMESTIC CREDITORS
FOREIGN DIRECT INVESTMENT
CURRENT ACCOUNT BALANCE
SHORT-TERM DEBT
DEBT RELIEF INITIATIVES
EXTERNAL DEBT OBLIGATIONS
CONTRACT
REPAYMENT
EXPENDITURES
CAPITAL FLOWS
AMORTIZATION
ISSUANCE
CURRENT ACCOUNT DEFICIT
DOMESTIC SAVINGS
SHARES
REAL EXCHANGE RATE
DEBT STOCKS
MARKET
LOCAL CURRENCY
FOREIGN EXCHANGE
NET DEBT
DEBT RATIOS
PUBLIC DEBT
EXPORTER
SOLVENCY
PRIVATE DEBT
INFRASTRUCTURE INVESTMENTS
GOVERNMENT DEBT
CURRENCIES
DEBT SERVICE TO EXPORTS
STOCKS
DEBT SITUATION
INVESTMENT
DEBT SERVICE OBLIGATIONS
RATES OF RETURN
BOND
EUROBOND
SOVEREIGN BONDS
SHARE
DEBT RESTRUCTURING
DEBT OBLIGATIONS
EXTERNAL PUBLIC DEBT
EXTERNAL SHOCKS
REVENUE
EXTERNAL DEBT
INVESTMENTS
CHECK
DEBT REPAYMENT
PUBLIC SECTOR DEBT
DEBT FORGIVENESS
AMOUNT OF DEBT
DEBT SERVICE TO EXPORTS
EXTERNAL FINANCING
POSITIVE DEBT
EXCHANGE RATE
DEBT SERVICING
DEBT SUSTAINABILITY
EXTERNAL DEBT SUSTAINABILITY
REMITTANCES
LIABILITIES
COMMODITY PRICES
ARREARS
SHORT TERM DEBT
DEBT REDUCTIONS
RISK ASSESSMENTS
DEBT DYNAMICS
CURRENT ACCOUNT BALANCES
EXTERNAL BORROWING
DEBT RELIEF




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