Sub-Saharan Debt: The Imperative of Contract Adjustment

Abstract

Managing sub-saharan African debt has been a source of serious challenge to scholars and policy formulators for over two decades now. Most of the approaches articulated so far such as debt reschedulling, debt equity swap, restructuring, cancellation, etc have failed to prove satisfactory to both parties on the debt devide, that is, the debtors and the creditors. In effect, a more engaging framework to manage the debt crisis is inevitable. The contract model enunciated in this paper seeks to apply extant rules of contract law to the loan transaction that gave rise to much of the debt in other to ascertain whether they meet the validity test in contract. Rules such unequal bagaining power, undue influence, frustration, impossibility of performance, etc, are generally applicable. Other rules such as the odious debt doctrine are begining to prove relevant in the debt management challenge.