Insights Blog

Debt and Sub-Saharan Africa

October 18, 2016
Debt and Sub-Saharan Africa image4you

Aleksandr Gevorkyan, assistant professor of economics at St. John’s University, and Ingrid Harvold Kvangraven, New School economics student, published an article in the Review of Development Economics.


The article, “Assessing Recent Determinants of Borrowing Costs in Sub-Saharan Africa,” describes how, over the past decade, Sub-Saharan African countries’ ability to draw on new debt in international capital markets has become a central characteristic of their development experience. Yet, the determinants of the borrowing costs are driven by external factors where investor perception plays a key role. This raises concerns over the sustainability of the current development model.

Unfortunately, there is little to be done in the short run. Dealing with Sub-Saharan countries’ recurring debt crises will require “tackling the debt problem at its root.” Since that includes their lack of a diversified economic structure and subsequent lack of competitiveness on the international market, that’s no small task.