Domestic Debt Markets in Sub-Saharan Africa

IMF Working Papers, March 1, 2004

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Domestic Debt Markets in Sub-Saharan Africa

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Bibliographic details

• Authors: Jakob E Christensen
• Published: March 1, 2004
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451846584.001

Scope and dataset

• Study covers 27 SSA countries during the 20-year period 1980-2000.
• Publication: IMF Working Papers, Working Paper No. 2004/046, Issue 046, Volume 2004.
• Pages: 23
• DOI: https://doi.org/10.5089/9781451846584.001
• ISBN: 9781451846584
• ISSN: 1018-5941
• Author: Jakob E Christensen
• Publication date: March 1, 2004

Key findings

• Domestic debt markets in these countries are generally small.
• Domestic debt markets are highly short-term in nature.
• Domestic debt markets often have a narrow investor base.
• Domestic interest payments present a significant burden to the budget, despite much smaller domestic than foreign indebtedness.
• The use of domestic debt is found to have significantly crowded out private sector lending.
• Significant differences exist between the size, cost, and maturity structure of domestic debt markets in HIPCs and non-HIPCs.

Thematic coverage (subjects and keywords)

• Subjects: Domestic debt, External debt, Financial markets, Government debt management, Interest payments, Public debt, Public financial management (PFM), Securities markets
• Keywords: Africa; crowding out; debt; debt market; debt portfolio; debt problem; debt reduction scheme; debt stock; debt sustainability; Domestic debt; extent HIPCs; Government debt management; HIPCs; interest burden; interest cost; Interest payments; investor base; longer-term debt portfolio; maturity structure; Securities markets; short-term debt; sub-Saharan Africa; treasury bill; treasury bill interest rates; WP

Summary conclusions relevant for policy and research

• Domestic debt markets’ small size, short maturities, and narrow investor bases are central constraints for government debt management in SSA.
• High domestic interest payments, relative to domestic indebtedness levels, imply fiscal strain that warrants attention in public financial management.
• Crowding out of private sector lending by public domestic borrowing indicates a trade-off between financing the public sector and supporting private-sector credit development.
• Differing market characteristics between HIPCs and non-HIPCs suggest tailored approaches are needed for debt market development and debt management strategies.

Domestic Debt Markets in Sub-Saharan Africa, IMF Working Papers 2004, 046 (2004).

Content in this bundle

• Domestic Debt Markets in Sub-Saharan Africa by Jakob Christensen -- IMF Working Paper No. 04/46
  • Domestic Debt Markets in Sub-Saharan Africa by Jakob Christensen -- IMF Working Paper No. 04/46 (Markdown version)
  • Domestic Debt Markets in Sub-Saharan Africa by Jakob Christensen -- IMF Working Paper No. 04/46 (PDF)