Posted by admin on 2024-11-21 11:04:54 | Last Updated by Egide on 2024-11-21 11:04:54
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The debts of countries and their development challenges
Together, we understand the country's debt as all the financial commitments made in the form of loans by the State, public authorities and organizations that directly depend on them. We also take into account what we call sovereign debts: They are also called public debts which cover all the loans contracted by a State. These can be used to finance infrastructure, support the economy during downturns, refinance old debts or stimulate and improve economic activity.
Why the debts of these African countries?
The debts of African countries result from the accumulation of the financing needs of the State, that is to say from the difference year after year between its products. In addition, these debts come to fill the void caused by civil wars, international sanctions imposed on certain African countries, pandemics like COVID 19 but also the wars of powerful countries which affect the economy of developing countries.In this type of case, the country finds itself in a situation where expenses are greater than income, the state budget is in deficit and the latter goes into debt. And so, do these debts cover what they should? *No way.* They are used in ways they were not intended. For this, countries go into debt to get out of debt and unfinished debts are always noticed. They slow down private investment and reduce social spending and finally they limit the government's capacity to implement reforms.
