African countries seeking to stabilize their debt levels should prioritize increasing growth, balancing public finances, and strengthening institutions, International Monetary Fund economists said in a report.
They argued that it is possible for debt stabilization efforts to prosper in Africa without restructuring debts, citing 60 such instances since 2000, including during the COVID-19 pandemic. Both “budgetary consolidation and real economic growth” will be key to achieving sustainable results, the authors wrote, especially for fragile countries afflicted by conflicts.
Nations including Ghana, Ethiopia, and Zambia have turned to the IMF following sovereign defaults in the last few years. But critics of the institution, such as the global nonprofit ActionAid, say that the constant focus on debt fixes through austerity measures is “eroding the foundations of public health care and education systems in Africa.”
