## Fiscal Sustainability in African HIPC Countries: A Policy Dilemma?

_IMF Working Papers, September 1, 2003_

## Source details

**Canonical URL:** [Fiscal Sustainability in African HIPC Countries: A Policy Dilemma?](https://www.imf.org/en/publications/wp/issues/2016/12/30/fiscal-sustainability-in-african-hipc-countries-a-policy-dilemma-16697)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/30/fiscal-sustainability-in-african-hipc-countries-a-policy-dilemma-16697/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/30/fiscal-sustainability-in-african-hipc-countries-a-policy-dilemma-16697/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/30/fiscal-sustainability-in-african-hipc-countries-a-policy-dilemma-16697/bundle-manifest.json)

## Bibliographic details
- Authors: Annalisa Fedelino, Alina Kudina
- Published: September 1, 2003
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451859539.001

---

### Overview
- Examines the link between fiscal policy and debt sustainability in a number of African countries participating in the Heavily Indebted Poor Countries (HIPC) Initiative.
- Core conclusion: on the basis of current fiscal policies, debt levels will remain unsustainable even after these countries graduate from the HIPC Initiative.

### Key findings
- Debt levels will remain unsustainable under current fiscal policies even after HIPC graduation.
- HIPC Initiative requirements imply a significant increase in poverty-reducing expenditure for participating countries.
- Increased poverty-reducing expenditure could result in weaker fiscal primary balances and a worsening debt sustainability outlook.
- Offsetting fiscal tightening may not be viable in these countries.

### Policy implications and recommendations
- Ensuring debt sustainability may require increased availability of nondebt-creating grants.
- Without increased nondebt-creating grants, debt sustainability in HIPC countries may prove elusive in the long term.

### Subjects and keywords
- Subjects: Debt sustainability, Exchange rate adjustments, External debt, Fiscal policy, Fiscal stance, Foreign exchange
- Keywords: concessional financing, creating flow, debt level, debt problem, debt ratio, Debt sustainability, debt-sustainability target, exchange rate, Exchange rate adjustments, Fiscal stance, GDP ratio, HIPC completion point, HIPC Initiative, Sub-Saharan Africa, sustainability threshold, WP

---

## Content in this bundle

- **Fiscal sustainability in African HIPC Countries: A Policy Dilemma? - WP/03/187**
  - [Fiscal sustainability in African HIPC Countries: A Policy Dilemma? - WP/03/187 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2003/_wp03187.pdf.md){rel="alternate" type="text/markdown"}
  - [Fiscal sustainability in African HIPC Countries: A Policy Dilemma? - WP/03/187 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2003/_wp03187.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/fiscal-sustainability-in-african-hipc-countries-a-policy-dilemma-16697_