Much ado about nothing? The limited effects of structural adjustment programmes and the highly indebted poor countries initiative on the reduction of external debts in sub-Saharan Africa: An empirical analysis

Reassessing the rationale underlying the emergence of structural adjustment programmes (SAPs) in the 1980s, this article looks more specifically at the effects of the heavily indebted poor countries (HIPC) initiative on the debt burden in Sub-Saharan Africa (SSA). Using data from the World Bank and the International Monetary Fund (IMF), it illustrates how in spite of important degrees of economic growth during the last decade and the promotion of the HIPC initiative since 1996, SSA’s total external debt remains a central dilemma. The annual debt service of many post-completion point HIPCs is even expected to increase until 2013. The development aid received by many countries is still often offset by their debt service payments so that in practice, the net transfer of wealth remains out of most SSA countries. Therefore, the empirical analysis shows a very limited effect of the HIPC initiative on the reduction of external debts. Thus, up to 2012, the persistence of this huge economic burden might contribute to explain why few countries have really progressed towards achieving the millennium development goals (MDGs).   Key words: Heavily indebted poor countries (HIPC) initiative, millennium development goals (MDGs), external debt, poverty reduction, sub-Saharan Africa.