Sub‐Saharan Africa's debt crisis: analysis and forecast based on Nigeria

Abstract

PurposeThe paper sets out to focus the attention of scholars and policy‐makers on the urgency of Nigeria's worsening debt crisis, with a view to suggesting initiatives which can be instrumental in preventing a further deterioration of the crisis.Design/methodology/approachThe recommendations suggested specifically addressed stated research objectives. The research framework attempted to evaluate the role played by Nigeria's past administrations in the evolvement of the crisis. It also appraised the crisis in the context of the new international environment surrounding it. The study suggested improvement to the methodological flaws inherent in modern‐day debt resolution framework, which, so far, has only undermined the implementation of past resolution initiatives at the practical level.FindingsAmong other findings, the study uncovered the following: without their modification to suit the peculiar needs and circumstances facing individual countries, modern‐day debt resolution initiatives will only continue to further impoverish Nigeria and sub‐Saharan Africa; over time, Nigeria's successive administrations‐through corruption and inconsistent administrative policies‐significantly contributed to the crisis; creditors establishments‐by knowingly favoring fraudulent administrations with huge, questionable loans (in their self‐serving interest to benefit from reverse resource transfer)‐in no small measure contributed to the crisis.Research limitations/implicationsThe projections into the future are only based on trends observed in the past. They do not include unexpected events which might dramatically affect the course of the crisis in the long or distant future.Practical implicationsIn order to ensure a successful implementation of resolution strategies suggested here and elsewhere, all the concerned parties will have to be actively involved‐both Nigeria and other indebted African countries, and all their external creditors.Originality/valueNigeria's external debt crisis was re‐appraised in the context of the new environment of the crisis. The findings and initiatives suggested for resolution here have a tremendous research value for scholars in the field. They also have an immense practical value for implementation by policy‐makers.