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Working Paper

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

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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World Bank, Washington, DC
Africa
2016-01-12T21:06:34Z | 2016-01-12T21:06:34Z | 2015-12

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.

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