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date: 24 November 2020

Abstract and Keywords

African economies did not accumulate serious debt until the 1980s, when unprecedented export credits and development lending combined with slowing exports to send debt ratios climbing. This build-up became exponential in the 1990s. Influenced by defaults elsewhere, particularly in Latin America, early discussions of debt relief for Africa emphasized attracting private capital rather than writing off debt outright. The original 1996 Heavily Indebted Poor Countries (HIPC) initiative reflected this gradualism; only upon its 1999 enhancement did Africa receive real relief. By 2005, and the announcement of the Multilateral Debt Relief Initiative (MDRI), HIPC relief approached US$40 billion. By 2014, African debt relief in total was of the order of US$120 billion, with tangible effects on economic stability and on anti-poverty spending. This newfound economic stability has in turn ushered in increased mineral exploration and discovery, with a resulting boom in spending and borrowing on international markets, which could yet lead to new debt distress.

Keywords: Africa, external debt, debt relief, default, natural resources

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