GRIN Verlag Public Debt Sustainability in Africa

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: Can Africa secure its economic future amidst a rising tide of public debt? This crucial question lies at the heart of this insightful study, which rigorously examines the sustainability of public debt across 40 African nations from 2001 to 2021. Going beyond conventional analyses, this research employs a sophisticated fiscal reaction function methodology, utilizing panel data and advanced econometric techniques, specifically fixed effects feasible generalized least squares, to uncover the intricate dynamics between debt levels, government fiscal behavior, and economic stability. It delves into the critical interplay of revenue generation and government spending, dissecting how these factors influence debt sustainability in both low-debt and high-debt African economies. By scrutinizing historical trends, including the impacts of the HIPC and MDRI initiatives, the Global Financial Crisis, and the unprecedented challenges of the COVID-19 pandemic, the study provides a comprehensive understanding of the evolving debt landscape in Africa. Explore in-depth analyses of key indicators such as the primary balance, and the influence of various control variables on fiscal responses. Uncover the nuanced differences in fiscal behavior between countries grappling with varying degrees of indebtedness. This book not only offers a rigorous empirical assessment of public debt sustainability but also provides invaluable policy recommendations for African governments striving to maintain sustainable debt levels and foster long-term economic development. It is essential reading for economists, policymakers, and anyone seeking a deeper understanding of the challenges and opportunities facing African economies in the 21st century. Discover crucial insights into Africa's economic trajectory and the strategies needed to navigate the complexities of public debt management for a brighter, more sustainable future. The research provides an understanding of public debt dynamics in Africa, and the empirical findings challenge preconceived notions and offer a fresh perspective on fiscal responsibility and sustainable growth. Delve into the heart of Africa's debt dilemma and discover pathways towards lasting economic resilience and prosperity. This book is a vital resource for understanding and addressing one of the most pressing challenges facing the continent today: ensuring a sustainable fiscal future.