Debt Crisis – Sub Saharan Africa

Similar to the Latin America Debt crisis of 1980-84, the debt crisis in Sub-Saharan Africa follows a similar pattern of high levels of borrowing to finance investment. Unfortunately, finance was often misused due to a combination of political corruption, inefficient allocation of resources, lack of infrastructure to make use of the economy.

Throughout the 1980s, the debt burden of many sub-Saharan African countries increased, but, their capacity to pay it back didn’t. Countries struggled to pay back the interest let alone debt capital and interest.

This has led to a big controversy over the extent to which debt should be forgiven.

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