What Strategies for the Sustainable Management of Public Debts in Sub-Saharan Africa?
Siméon Maxime Bikoué *
Advanced School of Economics and Commerce, University of Douala, Cameroon.
Collins Chi Penn
Faculty of Economics and Applied Management, University of Douala, Cameroon.
*Author to whom correspondence should be addressed.
Abstract
Aim/Method: This article examines the different strategies required for the sustainability of sub-Sahara Africa’s external debt by applying the Simonsen criterion[1] and the conditions of the Harrod-Domar debt and growth model.
Results/Conclusion: We then suggest that for debt to be sustainable the financial ratios have to be respected. So the effective servicing of the external debt in Sub-Saharan Africa requires that the expenses incurred in reducing poverty should be known. If the difference between the net returns and the expenses incurred in fighting against poverty is negative this reduces the burden of the debt. Finally, we recommend that Sub-Saharan African countries should use a combination of strategies based on sustainable development, financial resources of the government, and regulatory and institutional norms to manage their debts sustainably.
Keywords: Sustainable debt, Harrod-Domar model, Sub-Saharan Africa, financial debt ratios, Simonsen criterion, external debt.