Domestic Debt Markets in Sub-Saharan Africa

Christensen, Jakob

doi:10.2139/ssrn.878869

Cited by 24 publications

(15 citation statements)

References 3 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In general, many cross country-studies on Africa mainly center on the link between public debt and economic growth. For instance, Fosu (1999), Iyoha (1999) for sub-Saharan African countries; Christensen (2004) for 40 Sub-Saharan African countries; Musebu (2012) for Southern Africa Development Community (SADC),these authors postulate that rising public debt could have deleterious influence on economic performance and development in the region. Aside the work of Fagbemi and Olatunde (2019) that specifically explores the effect of public debt on domestic investment in 33 SSA countries using Panel - Corrected Standard Error Estimation (PCSE) and one - step System GMM dynamic panel estimations over the period 2000–2017, there seems to be no recent study.…”

Section: Literature Reviewmentioning

confidence: 99%

Public debt-investment nexus: the significance of investment-generation policy in West Africa

Fagbemi

Adeosun

2020

JEAS

View full text Add to dashboard Cite

PurposeThe main goal of the study is to explore the long run relationship between public debt and domestic investment in West Africa. Essentially, a study of this nature is to proffer major inroads into addressing low investment levels plaguing the region and securing critical fiscal policy measures.Design/methodology/approachThe study examines the long-run relationship between public debt and domestic investment in 13 West African countries between 1986 and 2018 with the use of Panel Dynamic Least Squares (DOLS) and Panel Fully Modified Least Squares (FMOLS), and causality test based on Toda and Yamamoto.FindingsPublic debt (% of GDP) and external debt stocks have an insignificant effect on domestic investment in the long run, suggesting the negligible effect of public debt on the level of investments in the region. Further evidence shows that domestic investment Granger causes public debt indicators, implying that there is unidirectional causality. This suggests that any investment-generation policy could engender a rise in public borrowing, although such public loans might not be effective when there is pervasive mismanagement of public funds, as public debts need to be well managed for ensuring improved investment.Research limitations/implicationsThe study suggests that maintaining a strong and effective debt-investment nexus requires fiscal consolidation efforts across countries, as such could lead to enhanced institutional capacity and sustainable investment-generation policy.Originality/valueSince panel regression techniques used by the previous studies (Fixed and Random effects) could be susceptible to possible statistical errors due to endogeneity issue and might not be well suited for explaining long-run effect or capturing the part of investment sustainability, their conclusions could be misleading and remain untenable in West Africa' s context. Hence, the study adopts techniques (DOLS and FMOLS) which could account for endogeneity issue and provide better elucidations for long-term effects.

show abstract

Section: Literature Reviewmentioning

confidence: 99%

Public debt-investment nexus: the significance of investment-generation policy in West Africa

Fagbemi

Adeosun

2020

JEAS

View full text Add to dashboard Cite

show abstract

“…35 As noted in the IEO report on fiscal adjustment (IEO, 2003) and the 2003 World Economic Outlook chapter on public debt (IMF, 2003), consistent time series on public debt (including the domestic component) are often lacking. A recent paper (Christensen, 2004) reports data on domestic debt for a set of 27 sub-Saharan African economies, but issues of coverage and the lack of consistent series on above-the-line fiscal accounts preclude its use here.…”

Section: Public Debt Dynamicsmentioning

confidence: 99%

The Design of IMF-Supported Programs

et al. 2005

View full text Add to dashboard Cite

The past 15 years have seen important developments in the challenges facing IMF member countries, and therefore in the objectives of the economic programs for which national authorities have sought the IMF's support. Yet the very responsiveness of the IMF to these evolving needs has inevitably complicated program design and the evaluation of program success. In this occasional paper, IMF staff take a detailed look at the experience with IMF-supported programs during 1995-2000.

show abstract

“…Mehl and Reynaud (2005) collected data on domestic debt structures in 33 countries from national sources, like we did, but over a shorter period (1994)(1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004) and with a less detailed breakdown. Christensen (2005) collected data on the domestic debt of 27 sub-Saharan African countries. A data collection project similar to ours has been independently pursued for Latin American countries, by the Inter-American Development Bank (Cowan and others, 2006).…”

Section: Introductionmentioning

confidence: 99%