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Post HIPC Growth Dynamics in Sub-Saharan Africa: An Application to Ethiopia

Author

Listed:
  • Nihal Bayraktar Nihal Bayraktar

    (Pennsylvania State University)

  • Hippolyte Fofack

Abstract

Over the past few years, Completion Point countries under the Highly Indebted Poor Country (HIPC) Initiative across Sub-Saharan Africa have enjoyed significantly higher investments and growth rates, primarily fueled by the expanding fiscal space of the post-HIPC era. Despite these post-HIPC growth rebounds, the region is not likely to meet the Millennium Development Goals (MDGs). Long-term growth projections from a simple macroeconomic model, which is applied to Ethiopia, suggest that prospects for reversing the widening income gaps with other regions of the developing world are limited and these gloomy prospects are likely to be even undermined by the risk of another sovereign debt crisis. A rapid expansion of capital accumulation financed by sustained foreign aid is required to increase income considerably.

Suggested Citation

  • Nihal Bayraktar Nihal Bayraktar & Hippolyte Fofack, 2013. "Post HIPC Growth Dynamics in Sub-Saharan Africa: An Application to Ethiopia," Journal of African Development, African Finance and Economic Association (AFEA), vol. 15(2), pages 61-90.
    • Handle: RePEc:afe:journl:v:15:y:2013:i:1:p:61-90
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    Citations

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    Cited by:

    1. Djimeu, Eric W., 2018. "The impact of the Heavily Indebted Poor Countries initiative on growth and investment in Africa," World Development, Elsevier, vol. 104(C), pages 108-127.
    2. Isaac Kwesi Ampah & Gabor David Kiss, 2019. "Economic Policy Implications of External Debt and Capital Flight in Sub-Saharan Africa’s Heavily Indebted Poor Countries," Society and Economy, Akadémiai Kiadó, Hungary, vol. 41(4), pages 523-542, December.

    More about this item

    Keywords

    Foreign aid; Growth; Big push; HIPC; Africa; Ethiopia;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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