Sub-Saharan Africa's subprime borrowers

In an article published in Project Syndicate today, Prof. Joseph Stiglitz of Columbia University and Hamid Rashid, Senior Advisor for Macroeconomic Policy in DPAD, discuss the recent spree of sovereign bond issues by a number of sub-Saharan economies and their impact on macroeconomic stability, long-term debt sustainability and development. They conclude, "There are no easy, risk-free paths to development and prosperity. But borrowing money from international financial markets is a strategy with enormous down-side risks, and only limited upside potential – except for the banks, which take their fees up front. Sub-Saharan Africa's economies, one hopes, will not have to repeat the costly lessons that other developing countries have learned over the past three decades."