More Debt Benefits, Less Burden

Abstract

Increasing debt risks suggest African countries’ hard-won market access should not be taken for granted over the next decade. While debt crises, defaults, and severe restructurings would not leave African countries shut out of the markets forever, there could be a long wait with appetites for investment taking many years to return. There are six ways borrowing can be improved to better finance urgently needed investment with less risky lending while preserving market access. Step one: deliver on debt transparency. Step two: deepen domestic debt markets. Step three: generate more flexible financing. Step four: provide market access parachutes. Step five: ensure tighter use of proceeds. Step six: make a solid plan, and build a sustainable brand.