The Nordic Africa Institute – Publications

As public debts are increasing in many African countries, we see a new type of debt distress, where short-term commercial loans and bonds have replaced some of the long-term multi- and bilateral loans. This policy note highlights two topical questions: what lies behind increasing levels of debt in Africa, and what are the challenges when financing development projects through loans?

Policy recommendations (in short):

• Debt transparency
• Better maturity matching
• Balance revenues and costs
• Prioritise investment projects and beware of white elephants
• Reject pro-cyclical fiscal policies