AFRICA’S RISING DEBT IMPLICATIONS FOR DEVELOPMENT FINANCING AND A SUSTAINABLE DEBT MANAGEMENT APPROACH

The document analyzes the resurgence of debt in Africa, noting that 19 countries have exceeded the 60% debt-to-GDP threshold. It identifies key drivers such as commodity price shocks, exchange rate volatility, and a shift from concessional to market-based loans. Through case studies of Nigeria and Morocco, it examines debt management strategies, including the use of Eurobonds and the importance of autonomous debt management offices, while recommending economic diversification and improved domestic resource mobilization to ensure long-term sustainability.

• A significant number of African countries have breached debt sustainability benchmarks: 19 countries exceeded the 60% debt-to-GDP threshold set by the African Monetary Co-operation Programme (AMCP), and 24 surpassed the 55% ratio suggested by the IMF.
• The composition of Africa's external debt has shifted away from concessional loans toward market-based loans, with concessional loans dropping from 66% of total external loans in 2005 to 54% in 2016, thereby increasing debt-servicing costs.
• Rising debt is driven by a combination of deteriorating macroeconomic conditions, including the 2014 commodity price shock, exchange rate volatility, and increased fiscal deficits following the 2007/2008 global financial crisis.
• Debt sustainability is severely compromised in several nations; Sudan, The Gambia, Mozambique, Chad, and Zimbabwe are identified as being in debt distress, having surpassed all sustainability thresholds.
• Many African governments use borrowed funds for recurring expenditure rather than productive capital investment, which undermines the ability of the debt to improve future revenue-earning capacity.
• In Nigeria, the Debt Management Office (DMO) has successfully rebalanced the debt portfolio, reducing the domestic-to-external debt ratio from 80:20 in 2015 to approximately 70:30 by 2018.
• Morocco implemented a strict fiscal rule under the 2016 Organic Finance Act, requiring that the flow of debt be dedicated exclusively to funding investment, meaning the fiscal deficit should not exceed the capital expenditure envelope.
• Effective debt management is hindered by institutional challenges, including a lack of autonomy for debt management offices and data opacity, particularly regarding contingent liabilities from state-owned enterprises (SOEs).

APA

Adeniran, A., Ekeruche, M. A., Bodunrin, O. S., Ali, A. A., Mandri, B., & Tayeb, G. (2018). AFRICA’S RISING DEBT IMPLICATIONS FOR DEVELOPMENT FINANCING AND A SUSTAINABLE DEBT MANAGEMENT APPROACH. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2018/11/GA_Th1_DP_Adeniran-et-al_20181130_GEG.pdf

Chicago

Adeniran, Adedeji, Mma Amara Ekeruche, Olalekan Samuel Bodunrin, Abdelaaziz Ait Ali, Badr Mandri, and Ghazi Tayeb. AFRICA’S RISING DEBT IMPLICATIONS FOR DEVELOPMENT FINANCING AND A SUSTAINABLE DEBT MANAGEMENT APPROACH. South African Institute of International Affairs, 2018. https://saiia.org.za/wp-content/uploads/2018/11/GA_Th1_DP_Adeniran-et-al_20181130_GEG.pdf.

Wikipedia

{{cite report |last1=Adeniran |first1=Adedeji |last2=Ekeruche |first2=Mma Amara |last3=Bodunrin |first3=Olalekan Samuel |last4=Ali |first4=Abdelaaziz Ait |last5=Mandri |first5=Badr |last6=Tayeb |first6=Ghazi |title=AFRICA’S RISING DEBT IMPLICATIONS FOR DEVELOPMENT FINANCING AND A SUSTAINABLE DEBT MANAGEMENT APPROACH |publisher=South African Institute of International Affairs |date=November 2018 |url=https://saiia.org.za/wp-content/uploads/2018/11/GA_Th1_DP_Adeniran-et-al_20181130_GEG.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{adeniran2018africas, author = {Adeniran, Adedeji and Ekeruche, Mma Amara and Bodunrin, Olalekan Samuel and Ali, Abdelaaziz Ait and Mandri, Badr and Tayeb, Ghazi}, title = {{AFRICA’S RISING DEBT IMPLICATIONS FOR DEVELOPMENT FINANCING AND A SUSTAINABLE DEBT MANAGEMENT APPROACH}}, institution = {South African Institute of International Affairs}, year = {2018}, month = nov, url = {https://saiia.org.za/wp-content/uploads/2018/11/GA_Th1_DP_Adeniran-et-al_20181130_GEG.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }