Effectiveness of Debt Indicators on Performance of Sub-Saharan African Economies: A Selected Review

Abstract:

Debt management strategy encompass much more than debts and how they were accumulated. Government debt management is the method of putting in place and effecting a strategy for transparently managing the government’s debt with the main objective of meeting the government’s financing needs; the costs and risks involved and any other debt management goals the government may have set. Such goals include evolving and preserving an efficient market for government securities. Many works thus tend to focus on debt and the crisis that ensued as a result but few or none of these works looked at the aspect of debt management that is required to guide the economic policy and decision makers in articulating far reaching decisions on how government should borrow and to what extent. In addition, questions such as the right source of finance and the maturity and composition of the instruments providing such are equally important in managing debt. These important aspects of debt management are crucial in managing government debts in the sub-Saharan Africa but conspicuously absent in both public and academic discussions in the region for some time. This work examines the relationship between the debt ratio of a country and the maturity of its debt; and between extent of indebtedness and the level of a country’s capital market development. By use of the regression models and analysis this work attempted to determine the stated relationships.