## Better Borrowing (book review of Where Credit Is Due: How Africa’s Debt Can Be a Benefit, Not a Burden)

## Source details

**Canonical URL:** [Better Borrowing (book review of Where Credit Is Due: How Africa’s Debt Can Be a Benefit, Not a Burden)](https://www.imf.org/-/media/files/publications/fandd/article/2021/december/book-arora.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/fandd/article/2021/december/book-arora.pdf.md)
- [Structured JSON version](/-/media/files/publications/fandd/article/2021/december/book-arora.pdf.json)

---

### Summary
- Reviewer: VIVEK ARORA, deputy director, IMF African Department.
- Book: Gregory Smith, Where Credit Is Due: How Africa’s Debt Can Be a Benefit, Not a Burden, Hurst Publishers, London, UK, 2021, 240 pp., $34.95.
- Central thesis: an approach called “borrowing with purpose” that links public borrowing to clear development strategies, better coordination among official creditors, more responsible and “virtuous” actions by private creditors, and flexibility by the “umpires and architects” of the international system.
- Main message highlighted: “evolution, not a revolution” of the international system for debt workouts.

### Africa’s public debt landscape and risks
- Debt trends and composition:
  - Africa’s debt has risen since 2010 after significant reductions through the Heavily Indebted Poor Country and the Multilateral Debt Relief initiatives and workouts with official and private creditors.
  - Recent debt is described as less concessional and more commercial than before and involves diverse lenders, including China and Africa’s regional institutions.
  - Countries increasingly access global financial markets and issue Eurobonds.
- Benefits and risks of market access:
  - Eurobonds help finance budgets amid declining foreign aid and provide a signal for attracting other capital flows, but also carry new risks.
- Historical perspective:
  - The international community’s debt relief during the debt crises of the 1980s and 1990s was insufficient, partly because of gaps in understanding how much debt is too much.
  - Smith criticizes adjustment programs supported by multilateral institutions during that period, though the reviewer notes the author does not fully develop that critique.

### China’s role
- Smith devotes a chapter to China’s lending to Africa, covering:
  - Scale, terms, nature, purposes, and risks of China’s lending.
  - China’s debt relief to African countries over the decades.

### Policy recommendations (Smith’s “better borrowing” prescriptions)
- Borrow prudently.
- Use debt for productive investment.
- Conduct active debt management.
- Increase debt transparency.
- Deepen domestic markets.
- Provide more flexible external financing.
- Improve coordination among official creditors and encourage more responsible private creditors.
- Seek flexibility from the “umpires and architects” of the international system (aiming for “evolution, not a revolution” in debt-workout frameworks such as the G20 Common Framework).

### Critique and readability
- Strengths:
  - Wealth of information on Africa’s public debt landscape, problems of high debt, and proposals for avoiding or resolving debt crises.
  - “Country stories” in each chapter illuminate particular country situations.
  - Commonsense approach and engaging style.
- Limitations noted by reviewer:
  - Operational definitions lacking for terms such as “calmer” capital, “smarter” investment, and policies that are “fine.”
  - Some IMF readers may object to the use of “bailouts” to refer to Fund programs.
  - The reviewer suggests readers might have appreciated more detail on how to operationalize recommendations.

### Takeaway
- The book is judged a valuable addition to the literature on African debt issues and recommended for readers interested in how debt can support development while minimizing crisis risks.

*December 2021 | FINANCE & DEVELOPMENT | BOOK REVIEWS — VIVEK ARORA, deputy director, IMF African Department*

---


_Source: https://www.imf.org/-/media/files/publications/fandd/article/2021/december/book-arora.pdf_