Addis Yimer’s Post

🌟 Exciting! 🌟 Here is our latest publication (by Addis Yimer and Alemayehu Geda) on Ethiopian Public Debt. The study examines the short- and long-term impacts of public debt on economic growth using a combination of theoretical approaches. Specifically, it focuses on analyzing the “crowding out” and “debt overhang” hypotheses. Based on this approach, the study aims to answer the following research questions: a) Does Ethiopia’s public debt have any effect on the country’s economic growth? b) If so, is the investment channel important? and c) How does this influence vary in the short run and the long run? #Ethiopia #PublicDebt #EconomicGrowth #Research #InvestmentAnalysis #CrowdingOut #DebtOverhang

With our forthcoming paper, "The Proximate and Fundamental Drivers of Public Debt in Ethiopia" we offer a recent, indepth & rigorous study on Ethiopian debt & growth. The WP version of the later is available at https://t.co/GPm4ivOVsW .. It offers valuable insights into the factors driving Ethiopia's public debt. The same site ( https://lnkd.in/dz3jEguP) contained our WP about the "Institutional Aspect of Ethiopian Debt Problem" (with Genet Alemu). Hope you find them worthwhile.

A recent article in Theoretical Economics highlights the critical role public debt plays in shaping economic outcomes across Africa. As the continent's average debt-to-GDP ratio climbed to 63.5% in 2023, it's key to understand the impact on income inequality. Read more about the interplay between public debt and income inequality, and what this means for Africa's future from The Brookings Institution: https://lnkd.in/gzKNfjCW

On why the debate about the reform of the international financial architecture matters from a new UN report - 'In Africa, the average person's spending on interest ($70) surpasses that of education ($60) and health ($39) per capita. A staggering 769 million Africans live in countries where interest payments outweigh investments in either education or health, accounting for nearly two-thirds of the entire population.' https://lnkd.in/diXjyU4y

I am very happy to publish a new paper in 'Economic Change and Restructuring' (Springer Nature Group), entitled 'Public debt and inequality in Sub‑Saharan Africa: the case of EMCCA and WAEMU countries’, coauthored with my friends and colleagues Albert LESSOUA (ESCE International Business School) and Nicolae Bogdan Ianc (West University of Timisoara and Université d'Orléans). The paper investigates whether public debt explains income inequality in several Sub-Saharan African (SSA) countries. The core method employed is the Bayesian Model Averaging (BMA) estimator, which uses a dataset covering the period 1997–2019. The key findings reveal that public debt tends to reduce inequality among the poor but may harm the rich in the WAEMU region. Public debt generally has a neutral impact on inequality in EMCCA but can improve income distribution among the rich under stringent corruption control. In terms of contributions, the paper is one of the first works that examine how public debt impacts inequality in the Sub-Saharan African (SSA) countries across different levels of income. Moreover, it explores the intricate relationship among public debt, socio-economic characteristics, corruption, and inequality within the region. Thanks Albert and Bogdan! The paper can be accessed at: https://lnkd.in/dXwPPvQS

Violent responses to mass mobilising in East Africa: possibly a new surge is in the making, springing from Kenya. Here is my take on the structural roots, which the average person may not trace in detail, but knows viscerally, from simply following current affairs. Two figures from the paper: between 1970 amd 2018, licit capital flight (note, NOT illicit) from Kenya was equal to 35% of total GDP in 2018. For Uganda the figure is 108%. Dip into the article to begin grappling.

FRANCO-NIGERIAN RELATIONS: POINTS TO NOTE. https://lnkd.in/gTtH5y8u Financial aid and technical support from France. Collaboration on food security initiatives. Promotion of climate-smart agriculture practices. French private sector investment in Nigeria’s agriculture. Knowledge exchange and capacity-building programs. Support for agricultural value chain development. Regional food security cooperation through ECOWAS. Empowerment of youth and women in agriculture. Use of agriculture as part of cultural and economic diplomacy. Challenges include insecurity and infrastructural deficits. Stephen Angbulu Tony O. Elumelu, C.F.R Adedeji Badejo, SHRM CP  Adebayo Onanuga Wale Edun hammid bakare Dr. Modupe Irele As of Q1 2024, Nigeria's public debt was US\$91.46 billion, which is made up of external and domestic debt: External debt: US\$42.12 billion Domestic debt: US\$49.35 billion  The debt-to-GDP ratio for Nigeria is expected to reach 39.40% by the end of 2024. This ratio is used by investors to measure a country's ability to pay back its debt, which affects borrowing costs and bond yields.  In the first half of 2024, Nigeria's debt servicing expenses were N6.04 trillion, which is a 68.8% increase from the same period in 2023 According to the National Institute of Statistics and Economic Studies (Insee), France's public debt was 103.5% of the country's GDP in the second quarter of 2024. This is after a €58.1 billion increase in net public debt during that quarter.  Second quarter 2024 Net public debt €2,981.5 billion Percentage of GDP 103.5% France's public debt has been increasing since 2005, and is one of the highest in the European Union. The country's debt-to-GDP ratio is well above the European Union's requirement of keeping public debt below 60% of GDP.  Here are some other indicators for France's economic outlook: General government balance -6.2% of GDP in 2024 Unemployment - 7.4% in 2024 Current account balance -0.5% of GDP in 2024  Africa Research Institute ECOWAS Commission African Development Bank Group African Union https://lnkd.in/g6DWEuKF

New publication (Journal of the Knowledge Economy, 2024). Our panel analysis and time series estimates show developing countries are largely sustainable except for four countries: Pakistan, Sri Lanka, Sudan, and Uganda, implying that although the fiscal response is stronger to the rising public debt ratios, there are countries in need of fiscal tightening and suggested to enhance primary balances to put their public debt ratios on a sustainable path. https://lnkd.in/gggMASGg

Thanks for sharing Ali Zafar. I strongly support your third option, also based on Ethiopia's recent experience with the Debt Service Suspension Initiative. Ethiopia got a $800mn DSSI payment holiday, but at the same time the fall of the Ethiopian birr combined with their USD borrowing increased the effective burden of their debts by 35 per cent over 2020-22. In US dollar terms that was an increase of $9.7bn (conservatively recalculating using 2021 exchange rates). So the debt increase was 12 times higher than the debt extension... (see graph). Without mitigating the FX risk in their book, the debt will never become sustainable. #innovation

Ethiopia’s economic growth expectation remains under threat due to a series of macroeconomic pressures facing the country even after the International Monetary Fund (IMF) extended a helping hand. Fiscal performance remains weak with negative impacts on government spending. Low revenue generation had resulted in borrowing until an external borrowing window was locked against Ethiopia due to a high interest rate in the global market and blockage due to payment default. https://lnkd.in/ex_6m8pi #ethiopia #insideafrica