Washington Consensus Reforms and Lessons for Economic Performance in Sub-Saharan Africa

摘要

The story of how African countries experienced a debt crisis in the 1980s began in the 1960s and 1970s, when newly independent African governments, struggling to help their countries recover from the ravages of European colonialism, carried out expansionary fiscal spending aimed at economic development. Governments also borrowed significantly to finance development expenditures over this time. Particularly for African countries that were oil exporters, the high oil prices of the 1970s made this borrowing look affordable. But in the 1980s, the economic tides turned. Falling oil prices along with a collapse in world prices of primary agricultural commodities, which made up 88 percent of Africa's exports, resulted in a shortfall in export revenues that put enormous pressure on government finances (Onyekwena and Ekeruche 2019; Mkandawire and Soludo 1999). The early 1980s also saw a global recession, along with an increase in real interest rates in donor countries that raised interest payments on previously contracted US dollar-denominated loans, markedly increasing the debt burden of African countries (Onyekwena and Ekeruche 2019; Due and Gladwin 1991). Additionally, Africa's governments featured largely in domestic financial institutions like the banking sector, with many of them nationalizing foreign banks or creating new state-owned financial institutions (Mkandawire 1999).