Traditional Debt Restructuring as an Impediment to African Economic Development

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Abstract Summary

Despite its resource wealth, over 40% of Sub-Saharan Africans live in absolute poverty.  With more resources than many of the developed countries, it leaves one to wonder why Africa is unable to sustain steady economic growth, if not dominance. For many highly indebted African countries, it has proved nearly impossible to simultaneously repay their external debts and achieve enduring economic development. Financial institutions and development organizations have taken steps to forgive Africa of its debt. If Africa is relieved of its debt, that would give the countries additional funds to invest in their economies and improve their human welfare and economic advancement, however this has proven not the case. By analyzing the relationship between economic variables, the research yields that despite the past initiatives’ debt relief, Africa has not achieved economic success. This study ventures to show that economic success/development can be achieved in African countries if the debt relief initiatives eliminate structural adjustment policies  and instead encourage localized policy making with the support of development institutions (and not led by them). Popular structural adjustment programs of three sub-Saharan African countries (1960-2016) are analyzed to reveal the negative correlation between traditional debt relief measure and economic success in Africa.

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International Studies


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