Following a decade-long surge, Sub-Saharan Africa’s public debt ratio reached a historic high of almost 60% of GDP in 2022, pushing over half of the region’s low-income countries into debt distress or high-risk territory. This paper investigates the extent to which fiscal prudence—defined as the disciplined pursuit of country-specific debt anchors and medium-term fiscal strategies—can safeguard growth sustainability in the region.

Methodology and findings:

Using a panel of 43 Sub-Saharan African economies from 2010 to 2023 and a novel debt–growth threshold model, we find that fiscal rules anchored around a 55%-of-GDP debt ceiling (the IMF-estimated median anchor) are associated with a 1.1 percentage-point higher long-run growth rate, provided primary balances adjust by 2–3% of GDP.

Debt composition matters:

However, the composition of debt matters: shifts toward costlier commercial and external private creditors—whose share rose from 14% in 2010 to 25% in 2023—have eroded fiscal space and amplified rollover risks.

Case-study evidence:

Case-study evidence from Benin and Burkina Faso illustrates how policy-based guarantees and full debt disclosure, respectively, can lengthen maturities and lower servicing costs, whereas countries that deviated from their anchors experienced growth reversals amid rising interest-to-revenue ratios.

Conclusion:

We conclude that, without a credible medium-term anchor and greater debt transparency, Sub-Saharan Africa faces a trade-off between stabilising debt and sustaining the growth momentum required to meet the SDGs. The paper offers policy recommendations for aligning fiscal prudence with developmental objectives under tightening global financial conditions.