Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229336
Authors: 
Were, Maureen
Mollel, Lekinyi
Year of Publication: 
2020
Series/Report no.: 
WIDER Working Paper No. 2020/112
Abstract: 
Rising public debt in sub-Saharan Africa remains a matter of concern. We provide an analysis of public debt and debt sustainability in Tanzania, focusing on external debt. Though current and previous analyses using the IMF-World Bank debt sustainability framework indicate low risk of public external debt distress, these analyses are sensitive to exchange rate volatility and export shocks and are predicated on strong assumptions of robust future economic growth and reduced government borrowing. Moreover, empirical evidence of debt sustainability based on the fiscal reaction function approach is weak. The challenge lies in ensuring debt remains sustainable, given the need to scale up development expenditure to address infrastructure gaps amid dwindling donor financing and vulnerability to exogenous shocks, particularly in light of the COVID-19 pandemic. Rapid debt accumulation-particularly commercial debt-could expose Tanzania to external risks. Leveraging on concessional borrowing, efficient public investment, enhanced debt management, and domestic resource mobilization are critical.
Subjects: 
public debt
Tanzania
debt sustainability
external debt
JEL: 
E60
E62
H63
H68
Persistent Identifier of the first edition: 
ISBN: 
978-92-9256-869-6
Document Type: 
Working Paper

Files in This Item:
File
Size
968.38 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.