Debt burden and corruption impacts: African market dynamism

Abstract

Heavy debt burdens and corruption have not only had a debilitating effect on development but also undermined efforts at economic recovery and market‐enhancing initiatives in many African countries. Africa is the world’s most aid‐dependent and indebted region of the world. Much of the resources that could have been ploughed into investments are used to service debts and/or misappropriated by corrupt leaders – with all the attendant negative perceptions of Africa’s business environment. Therefore, in developing a “business plan” for Africa’s economic renascence, corruption and debt management and mismanagement (by both lenders and borrowers) need to be put squarely on the agenda. Against the backdrop of the currency of opinion for debt relief, this paper highlights the institutional processes that underlie the misallocation and misappropriation of original receipts, policy dynamism of their management and the overall market impact.