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Public Debt and Exchange Rate Volatility in Africa: Implications for Trade and Investment

Author

Listed:
  • Khadijah Iddrisu

    (Accra, Ghana)

  • Simplice A. Asongu

    (Johannesburg, South Africa)

  • Richard Stephens Cromwell

    (Cape Coast, Ghana)

Abstract

This chapter explore the link between public debt and exchange rate volatility in Africa, showing how each reinforces the other and impacts trade, investment, and financial stability. It traced historical debt trends and recent post-COVID challenges, noting rising debt distress. Exchange rate patterns vary, with commodity exporters facing volatility, the CFA zone enjoying stability with trade-offs, and flexible regimes struggling with shocks. The chapter revealed how this debt–currency nexus affects competitiveness, integration, and capital flows. The chapter calls for prudent debt management, deeper financial markets, regional coordination, and risk-mitigation tools to enhance resilience and support sustainable economic development across Africa.

Suggested Citation

  • Khadijah Iddrisu & Simplice A. Asongu & Richard Stephens Cromwell, 2026. "Public Debt and Exchange Rate Volatility in Africa: Implications for Trade and Investment," Working Papers 26/057, European Xtramile Centre of African Studies (EXCAS).
    • Handle: RePEc:exs:wpaper:26/057
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    File Function: Revised version, 2026
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