Mihai Mutascu’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

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

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.

Have a look at also to our forthcoming paper (by Alemayehu Geda and Addis Yimer, "The Proximate and Fundamental Drivers of Public Debt in Ethiopia." The WP version is available at https://lnkd.in/d3X3dKFT It offers valuable insights into the factors driving Ethiopia's public debt. Hope you find it worthwhile!

Here’s a fair assessment of how we account for the economic progress that #Jamaica has begun to experience over the last decade. It began over a decade ago with a decision by the then ruling party to adopt the requisite #fiscaldiscipline necessary to curb its spending, reduce its #indebtedness while partnering with private sector entities in an atmosphere of collaboration for the purpose of #nationbuilding. Ultimately, a buy-in by both major political parties was critical, in that when leadership changed hands, the essential elements of #economicreform continued, even amid the absence of #economicgrowth during the period. All this was further bolstered by the #accountability component. Consequently, Jamaica has become a case study for #emergingeconomies worldwide. Yet we cannot live on our laurels, for yonder lies economic prosperity, which continues to elude the majority of the population, who continue to stagger under the oppressive #inflation, even while, collectively, the #economy has turned the corner.

According to a 2015 survey by the Financial Sector Conduct Authority and Human Sciences Research Council, South Africa has a financial literacy rate of 51%. In 2021, the Organisation for Economic Co-operation and Development put that number at 42%. #Africa #People #Leadership

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

Great post below on the topic of financial debt, and the way in which the debt repayments of many developing countries are more expensive, and disproportionately undermine their development efforts compared to more developed countries. Key NGOs focusing on local development are coming together to advocate for solutions to the problem of debt. But are the relevant international institutions and developed world governments open to revisiting this long- standing development challenge? Because there are solutions available but they will require political resolve and flexibility with the goal of balanced and equitable global development as the overarching, strategic objective.

Insightful. African nations have lower debt to GDP ratios. A 2020 study by Moody’s analytics shows Africa has lowest risk of default on infrastructure compared to its peers. Yet debt is costlier to African nations. Time to redefine the global financial architecture?

🌍 I’m in Rome with key players in the Vatican and global Catholic networks planning a campaign to address the Global Debt Crisis 💡 🔴 The Problem: For the first time in 20 years, financial flows to developing countries have turned negative – debt service payments now exceed aid and new investment. 3.3 billion people live in countries where debt service outweighs spending on health or education. 💥 This is a systemic crisis for our People and Our Planet. 🌀 The Complexity: 20 years ago, $130bn in illegitimate debt was cancelled, thanks to global pressure. It sent 50m children to school. Today, the situation is fundamentally different for three reasons: 1️⃣ Lack of Interest: Political pressure from G7 countries is almost nonexistent, with attention diverted elsewhere. 2️⃣ Different Creditors: Previously G8 countries held the debt. Now China holds 13% of Africa’s debt stock, private creditors hold 39%, and others like multilaterals hold 34%. 3️⃣ Debt Forgiveness vs. Access: African Finance Ministers need access to capital markets - debt forgiveness will increase their cost of borrowing. 💡 African nations have lower debt-to-GDP ratios than advanced economies, but their debt is far more expensive. The solution lies in reducing the cost of debt. 💰 Current Debt: This year alone, African governments are spending $47bn on private debt service. Redirecting that money to schools and hospitals is critical. With strategic buyers (like the IMF) refinancing debt, we can make a significant impact. 💡 Future Debt: By 2050, one in four people on the planet will be African. The infrastructure, energy, and education investments needed are immense. African leaders are calling out bias in risk allocation, which makes their debt unnecessarily expensive. 📉 A Cost of Capital Commission could tackle this issue by addressing credit ratings, data transparency, and banking regulations. This builds on successful G20 reforms which have already unlocked billions in additional lending. 🙏 What should campaigners do? These are not technically difficult solutions, but they lack political will. We need a strong drumbeat of advocacy, letters, and petitions to make leaders understand that now is the time to act. 🌍#DebtCrisis #FinancialJustice #GlobalDevelopment #G20 #Africa #DebtRestructuring #SustainableFinance #FutureOfAfrica Caritas Caritas Internationalis CAFOD Martin Guzman Jamie Drummond Anne Finucane The ONE Campaign Nicole Itano Christian Aid