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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