Back

AES2025: Fiscal Policy Challenges: Navigating Public Finance Management and Debt Sustainability

July 14, 2025
Related topics: 
Economy
Sectorial policies and structural transformation

African policymakers face complex fiscal policy challenges as they seek to balance limited resources and rising debt with pressing development goals. Persistent deficits, constrained revenue mobilization, and mounting debt service obligations restrict the fiscal space necessary for infrastructure, social services, and climate resilience. Shifting debt profiles—toward more commercial, higher-cost, and shorter-term borrowing—raise exposure to external shocks and refinancing risks.

Meanwhile, opportunities such as critical minerals create scope for expanding fiscal space, yet demand robust governance mechanisms to avoid resource mismanagement. Institutional reforms, strong fiscal rules, and enhanced transparency are vital to improving the credibility and flexibility of public financial management systems. In addition, current debt resolution frameworks and sustainability analyses must evolve to reflect Africa’s development and climate realities. Innovative financing instruments and prudent expenditure choices offer potential pathways, but also introduce new risks and implementation dilemmas.

  • How can countries strengthen revenue mobilization and leverage innovative financing without hampering growth or equity?
  • What reforms can boost expenditure efficiency and protect essential services during fiscal consolidation?
  • How should institutional frameworks and governance mechanisms evolve to enhance fiscal credibility and manage natural resources?
  • What approaches best address debt sustainability and resolution, considering Africa’s unique risks and long-term needs?

 

French translation

RELATED CONTENT

  • Download PDF
    L'émergence des cryptomonnaies en Afrique : réalité ou surévaluation ?
    Authors
    Henri-Louis Védie
    December 8, 2022
    Cette étude concerne 33 États du continent africain où, en 2022, le % des détenteurs de cryptomonnaies de chaque pays, par rapport à sa population est au minimum de 1 %. À eux seuls, trois parmi ce groupe de pays, que sont l’Afrique du Sud, le Kenya et le Nigeria, totalisent plus de 333 millions de personnes, avec des pourcentages de leurs détenteurs de cryptomonnaies proches compris entre plus de 12 % en Afrique du Sud, plus de 11 % au Kenya et plus de 10 % au Nigeria. À l' ...
  • Download PDF
    DIGITALISE TO INDUSTRIALISE : Egypt, Morocco, Tunisia, and the Africa–Europe Partnership
    Authors
    Karim El Aynaoui
    Larabi Jaïdi
    Akram Zaoui
    November 24, 2022
    This chapter was originally published in the book "Africa–Europe Cooperation and Digital Transformation", co-edited by Chux Daniels, Benedikt Erfoth, and Chloe Teevan Since the mid-2010s, North African countries have been pursuing what some observers have called a “return to Africa” (Dworkin, 2020). Egypt, Morocco, and Tunisia have attempted to position themselves as major components of Europe- Mediterranean-Africa infrastructure and supply chains corridors (Tanchum, 2020). The thr ...
  • Download PDF
    A strong dollar is contractionary for the global economy
    Authors
    Otaviano Canuto
    November 22, 2022
    The US dollar has risen dramatically in value against other currencies recently. Three channels through which factors affecting bilateral exchange rates operate have been pulling up the U.S. dollar: yield differentials, liquidity differentials, and growth differentials. The strong appreciation of the US dollar against other currencies recently reinforced the contractionary pressures present in the global economy. Ultimately, the “turn” or “pivot” of the dollar will most likely occur ...
  • Download PDF
    Informal Markets and Parallel States
    Authors
    Hisham Aidi
    November 17, 2022
    This piece examines the role of labor and religious movements in the face of the “informalization” of the African economy. How does the growth of an informal sector set back class formation and labor activism? How will the rise of economic networks outside formal economic and political channels affect state capacity? Can labor unions develop organizational independence if the labor market is segmented with a growing number of informal workers? What happens when labor market “insider ...
  • Presentation Seminar: Annual Report on the Economy of Africa - Panel 2 & 3
    November 4, 2022
    Panel 2: Les Communautés Economiques Régionales : Quel apport à la résilience africaine dans un contexte de chocs multidimensionnels ? Modérateur:            Abdelaaziz Aït Ali, Manager – Département d’économie, Pol...
  • Le débat parlementaire sur la loi de Finances: Lisibilité, transparence et sincérité du budget
    Authors
    Larabi Jaïdi
    October 28, 2022
    Le débat parlementaire sur la loi de Finances va bientôt entamer son cycle annuel. L'examen de la loi de Finances est un temps fort du débat budgétaire. Il est indéniable que la finalité de la représentation nationale est de promouvoir une logique d'efficacité des institutions du Royaume. Le débat déborde naturellement le cadre de travail des commissions et des séances publiques parlementaires pour irradier la presse, les acteurs économiques et sociaux et l'opinion publique. La diff ...
  • Will Latin America Return to Mediocre Growth After Shocks?
    Authors
    Otaviano Canuto
    October 24, 2022
    The pandemic has hit Latin America hard, and its economic recovery has been slower than in other regions. In addition to the legacy of higher public indebtedness, the pandemic left scars on the labor market and the human capital formation of future workers. The COVID-19 crisis has receded in Latin America but has left a significant toll. Reported deaths from the pandemic are currently low and converging to global levels. The average excess mortality during the pandemic was among t ...
  • Formalizing the Informal Sector: a Fundamental Policy for the Economic Stability of the MENA Region
    Authors
    Hamza Saoudi
    October 18, 2022
     This publication was originally published in the IEMed Mediterranean Yearbook 2022   The informal sector plays a major role in most MENA economies. It employs a large share of the total population and, on average, accounts for about 22% of GDP. According to the International Labour Organization (ILO), which defines informal employment as the proportion of workers without access to social security, the share of informal employment in total employment in MENA countries ra ...