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.