"Rapid economic growth does not make a country immune to debt distress"
Jörgen Levin is very critical to the pro-cyclical fiscal policies that many African governments follow, that is the tendency to rise public spending in periods of boom and cut it in times of recession. According to him, governments – in particular those rich in natural resource rich countries – should instead institutionalise rules to save when prices are high (good times) and boost public spending when prices are low (bad times).
- Debt transparency
- Better maturity matching
- Balance revenues and costs
- Prioritise investment projects and beware of white elephants
- Reject pro-cyclical fiscal policies
Risks and Challenges of Debt-Financed Development : Roots and causes of the rising debt levels in Africa – Policy Note No 7:2019
Download the full-text version from our online repository Diva.
Jörgen Levin is a senior researcher at the Nordic Africa Institute. His fields of research are Macroeconomics, Inclusive Growth, Taxation and Public Spending and Sustainable Development Goals (SDGs), with a focus on East Africa in general and Kenya and Tanzania in particular.
NAI Policy Notes is a series of short briefs on relevant topics, intended for strategists, analysts and decision makers in foreign policy, aid and development. They aim to inform public debate and generate input into the sphere of policymaking. The opinions expressed are those of the authors and do not necessarily reflect the views of the Institute.