The external debt difficulties of low income Africa

Abstract

Two debt crises affect developing countries. The more publicized crisis affects the middle income Baker Plan countries, including Nigeria and Cote d'Ivoire. The less well known crisis affects most of Africa's 34 low income countries. Poverty and economic rigidities in the African countries make it harder for them to grow out of their debt problems without special assistance. These countries are more dependent than the highly indebted countries on primary commodity exports, which often require long investment periods to increase production. Debtor countries must take the lead in establishing and maintaining workable medium term adjustment programs. Once adjustment is occuring, it is in the interests of donors and creditors to continue supporting recovery well into the 1990s.