AFRICA'S DEBT CRISIS: A CRITICAL APPRAISAL OF SELECTED AFRICAN COUNTRIES

Abstract

African debt has risen in the past few decades, driven by persistent budget deficits, excessive dependence on foreign borrowing, and susceptibility to external economic shocks. The growth of the debt burden has exposed fiscal sustainability to increasing pressures and eroded economic growth in the continent. Therefore, empirically, this study analyzed Africa’s debt crisis by examining five selected African countries, one from each region: Nigeria, Egypt, Kenya, Zimbabwe and the Congo Republic, spanning from 1986 to 2023. Data were sourced from the World Development Indicators, the International Monetary Fund (IMF), and Central Bank of Nigeria Statistical Bulletin. The model employed was a fixed effects model based on the significance of Hausman’s test. Analysis revealed that government spending and exchange rate were statistically significant with a positive influence on public debt, while inflation contributed positively but insignificantly. GDP growth was discovered to negatively correlate with the public debt, although it was not statistically significant, implying that economic growth did not significantly lower the debt burden. The study concluded that the external imbalances, inefficiencies in the structure of the economy, and inappropriate management of the funds were the underlying causes for the long-run public debt crisis in the continent. The study based on the findings suggested the need for immediate comprehensive fiscal discipline, exchange rate stabilization, and structural reforms to reverse and stem Africa’s increasing debt trajectory in a sustainable way. Keywords:  Public Debt, Government Expenditure, Exchange rate, Economic Growth, Africa Introduction.