Canute Birch’s Post

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

*Greece Debt Crisis* A decade-long economic crisis plagued Greece.The country's unsustainable debt levels, coupled with a recession, led to a series of bailouts from international lenders. This crisis strained Greece's economy and social fabric, resulting in widespread austerity measures and political upheaval. #Greece #Greece_Debt_Crisis #Economices #Content

"The Paradox of Africa: Rising Economy or Rising Debt?" 40% of African Nations in Debt Crisis – ECA The United Nations Economic Commission for Africa (ECA) says 40 per cent of African nations are in debt distress or at high risk, with most spending more on debt interest payments than on critical sectors. #Africa #Africans #Debt United Nations Economic Commission for Africa #South #North #East #West #Globaldebt #GDP #Economy #Rate #Oil

''The high interest rates paid by African countries on their public debt are hindering their development efforts. The significant increase in public debt is due to increased government spending to mitigate the impact of global shocks such as the Covid-19 pandemic and inflation'' However, a significant portion of the expensive debt taken on is not being prudently spent, and infrastructure projects are often grossly overpriced, not properly planned, which means they do not have any meaningful impact on the economic environment. Instead, they often become white elephants, which are expensive to maintain and do not generate sufficient returns to justify their cost. This lack of planning and oversight leads to a significant waste of resources, which could otherwise be used to support sustainable development.

The Greek debt crisis that began in 2009 has cast a long shadow over European integration. New research from Nicola Nones documents how the crisis became a "morality tale" that continues to shape perceptions about #Greece today. The study assesses the "moral sentiment" of more than than 14,000 articles about Greece in the Wall Street Journal, the Financial Times and Handelsblatt. It finds that articles about Greece took a distinctly negative moral tone from the start of the crisis, with the country associated with traits such as indiscipline, extravagance, laziness and irresponsibility. Over a decade later, the moral sentiment of articles about Greece had still not recovered to pre-crisis levels. This underlines just how enduring economic narratives can be. https://lnkd.in/epdcsyZ4

International Community joins Africa in Debt Challenge - https://lnkd.in/gnFdr5vv - By Gregory Simpkins Debt is a cancer that eats away a government’s ability to manage its economic affairs. It prevents governments from providing required social services, security and economic development. It discourages foreign investment. It limits sovereignty when governments must look to economically stronger nations to bail them out of their

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

The recent findings by the United Nations Economic Commission for Africa highlight a critical rise in #Africa's external debt, which poses significant challenges to the continent's financial stability and progress toward sustainable development. While countries like #Nigeria have shown promising improvements in #debt #management, the broader debt crisis underscores the need for systemic reforms and enhanced domestic resource mobilization across the region. Addressing these issues will require coordinated efforts at both the national and international levels. #SAR #Debt #Africa #EmergingMarkets #Development #UN #CreditRatingInAfrica #ECA #Reform https://lnkd.in/dgCsYSsR

The Economic Commission for Africa (ECA) has called on countries to explore reforms on the common debt relief framework to better address rising indebtedness in Africa. United Nations Economic Commission for Africa #insideAfrica

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