Debt-funded Government Spending Destabilizes and Impoverishes African Economies

[Editor’s note: As discussed in How Government Debt, Inflation, and Taxes Impoverish African Economies, government deficit spending, monetary inflation, and high taxes are destructive policies that distort, destabilize, and impoverish economies in Africa and globally. This text expands on the first section of that article, which examines the detrimental effects of government debt accumulation and deficit spending]

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The longstanding policy of government debt accumulation due to persistent deficit spending has been causing many problems for economies around the world. The adverse effects of government deficit spending and debt accumulation impact economies differently, with developing economies being particularly and more quickly affected by this statist approach. Many African economies are among the most adversely impacted, facing destabilizing and impoverishing consequences.

Government debt accumulation and deficit spending continue to lead to debilitating inflation, debt crises, economic instability, and other detrimental issues that severely hinder capital formation, economic development, and prosperity in Africa and other regions.

African countries became ‘independent’ nation-states within a statist global order established by Western imperial states dominated by statist economic models and a fiat, debt-based monetary order. As a result, state-led economic development has been the dominant approach. Despite 50 years of Western statist economic models, technical assistance, and development aid, Africa is now facing widespread economic instability, hardship, and sociopolitical turmoil. The detrimental impact of Western models is evident as debt-fueled deficit spending is the central policy that devastates African economies and perpetuates tyranny, instability, poverty, and dependence.

As economic conditions continue to deteriorate locally and globally, and another wave of government debt distress sweeps the continent, with some countries like Zambia, Ghana, and Ethiopia having defaulted on some of their Eurobond payment obligations, the need for a different approach is unquestionable.

African policymakers are called to prioritize solvency and fiscal independence by shifting away from the state-directed model, which has proven repressive and ruinous, and embracing a market-driven approach. This approach can foster stable and thriving African economies, offering the continent a better economic and geopolitical prospect.

Africa’s Government Debt Buildup and Outlook

Most African countries are on a ruinous fiscal path. Government debt accumulation and deficit spending are severely detrimental to economic stability, development, and social harmony. African policymakers are repeating past mistakes of accumulating excessive debt, further exposing their countries to external shocks and diktats, even though such an approach has never transformed a poor country into a prosperous one anywhere in recorded history.

African nations will not be the first to achieve economic stability and prosperity through government debt accumulation and deft spending, as this policy is inherently detrimental to economic stability and prosperity.

Although government debt as a percentage of GDP in Africa remains relatively low at around 60 percent, African governments have accumulated excessive debt since the Great Recession (2007-09), with many of them approaching hazardous levels, nearing the 100 percent debt to GDP mark. What is more concerning is that this trend does not show signs of abating even amid rising and increasingly detrimental debt servicing costs.

A recent United Nations report highlights that many indebted countries in the developing world face a scenario in which spending on government debt servicing surpasses expenditures on education or healthcare. Similarly, the IMF’s African Department notes: “The average debt ratio in Africa has almost doubled in just a decade—from 30 percent of GDP at the end of 2013 to almost 60 percent of GDP by end-2022. Repaying this debt has also become much costlier.”

Figure 1: Yearly external debt service cost as a share of government spending.

Source: OneData

A 2024 report by Afreximbank Research mentions that nine African countries are currently in debt distress, with nearly twenty more at a high risk of debt distress. Due to a pervasive lack of honesty often observed in government reporting, it is reasonable to assume that the number of African countries in debt distress or at high risk of debt distress is higher than officially reported.

This ruinous situation underscores the importance of African countries moving away from the Western model of government debt accumulation and deficit spending, as it has proven destabilizing and detrimental to economic development. The policy of government debt accumulation is particularly destabilizing and impoverishing in developing regions, whose economies typically deal with high debt servicing costs, unstable currencies, and foreign exchange volatility, among other debilitating issues.

UN Secretary-General António Guterres has expressed concern about global debt, stating, “Half our world is sinking into a development disaster, fueled by a crushing debt crisis.” This statement accurately reflects the severity of the situation. The current approach to economic development, which relies heavily on debt-based, government-driven initiatives, has proven disastrous, causing widespread economic instability, impoverishment, and hardship.

African policymakers are urged to prioritize fiscal solvency by adopting a fundamentally different approach. The state-directed approach has failed to foster stable and thriving African economies. A policy of debt-driven government spending cannot lead to African economic development and prosperity. This policy is destabilizing and impoverishing.

Figure 2: Current trends suggest that despite increasing debt distress and servicing costs, Africa’s government debt accumulation will likely continue to trend upward, indicating a grim fiscal and economic outlook that requires policy changes.

Source: Afreximbank Research

The current government debt levels in Africa show signs of distress despite the continent’s average debt-to-GDP ratio remaining comparatively low at around 60 percent. Continuing this fiscal path could lead many countries to economic disaster and severe sociopolitical unrest. It is perplexing that African policymakers persist in accumulating debt and deficit spending despite clear evidence that this policy does not lead to stable and prosperous economies—a goal that should be their top priority. This is especially concerning given the current living cost crisis, high inflation, shortages, social unrest, increasing food insecurity, and noticeably deteriorating economic conditions across the continent.

African politicians may know that debt-fueled government spending is unsustainable and ruinous. Nonetheless, they often prioritize short-term relief provided by loans, which disproportionately benefits the state, political elites, and their associates despite this policy’s destabilizing and impoverishing consequences.

For political actors, self-interest and political expediency typically take precedence over adopting sound economic policies. Many politicians, not only in Africa, tend to prioritize their own interests and agendas when running the government. This often leads to adopting policies that serve their interests and are popular, even if it means implementing harmful policies such as accumulating debt, printing currency, and increasing taxes to sustain government deficit spending.

While government spending benefits the state, politicians, and their associates, enhancing government power and control over society, note that politicians do a great disservice to society because, whether financed through debt accumulation, monetary inflation, or heavier taxation, government spending distorts, destabilizes, and impoverishes the economy. By simultaneously maintaining these three detrimental policies, government officials cause even more extended damage to society and severely undermine economic stability and prosperity.

As mentioned earlier, Africa is not the only region experiencing debt distress. Much of the world faces significant debt burdens and distress, with fiscal prospects worsening over time, harming economic stability, growth, and societal well-being. The current global economic landscape is characterized by normalized government debt accumulation and deficit spending, which can be traced to the influence of British economist John Keynes following World War I.

Keynes was pivotal in shifting mainstream economic thinking from primarily market-based theories and policy recommendations to state-centered economic models that advocate for government management of the economy. In other words, Keynes and his followers overturned economics, turning it into a predominantly state-driven and state-serving discipline.

It is essential to recognize that in the context of statism, not free-market capitalism, government debt accumulation and deficit spending have become normalized and dominant worldwide. In an article discussing why the definition of inflation has been altered, I remark:

Contrary to the prevailing academic and popular view, the United States, other Western countries, and the current global order established by Western imperialist states are not capitalist (market-driven) systems but rather heavily statist systems. The world is characterized by state-managed economies, employing top-down, technocratic methods that involve coercive, confiscatory, and repressive policies, thereby exerting extensive centralized socioeconomic control. (For a comparative analysis of the various socioeconomic systems, see The Scale of Statism.)

While Western nation-states have long been statist economies, the work of British economist John Maynard Keynes in the early 20th century caused a fundamental shift in mainstream economics from primarily market-based to state-centered economics. This shift, which I call the Keynesian shift, has provided the intellectual basis for centralized state management of economies and has since kept the economics field state-centered and state-serving.

The Keynesian shift and fiat monetary systems are fundamental reasons for the ruinous features of contemporary economies. These include repression, centralization, corruption, rampant inflation (monetary, asset, and price), high indebtedness, and crises. This conjunction is the primary factor driving worldwide economic turmoil, devastation, and widespread human suffering within state-managed economies burdened with excessive government debt and persistent deficit spending.

Moreover, this situation is aggravated by other detrimental statist policies such as heavy taxation, bailouts, and subsidies, which exacerbate economic distortions, structural injustices, impoverishment, and social strife.

African politicians do a severe disservice to African economic integration, transformation, and liberation by continuing with the destabilizing and impoverishing policy of government debt accumulation and deficit spending. The current statist approach is severely detrimental to economic stability and prosperity. African leaders must abandon it and prioritize fiscal solvency to foster stable and thriving African economies.

Sources of Government Revenue

Government spending can be financed through 1) taxation, 2) debt accumulation, and 3) monetary inflation (currency and credit creation). While a few countries have sizable sovereign wealth funds that could augment government spending capacity, historically and presently, governments finance their expenditure through these three methods: taxes, debt, and currency debasement.

Each of these methods of financing government spending has distinct detrimental consequences for society. When used excessively and especially when enforced simultaneously, their cumulative destructive effect is amplified, becoming insidiously destabilizing, impoverishing, and oppressive.

1) Taxation:

Evidence indicates an inverse correlation between economic growth and taxation. Indeed, as the tax burden on the economy becomes heavier, this invariably harms productive investment, economic productivity, and growth. Besides having detrimental economic effects, a heavy taxation policy also has harmful sociological and demographic effects, although these tend to be less pronounced and quantifiable. Ethically, due to its inherent reliance on coercion and enforcement through state aggression, taxation can be considered confiscatory and extortive, therefore morally unacceptable.

Africonomics maintains that taxation is inherently coercive, extortive, distortive, and oppressive—therefore, unethical and morally unacceptable. Taxation must be minimal to nonexistent to minimize confiscation, oppression, and injustice and foster economic prosperity, peaceful human relations, and civilization.

2) Debt-financing:

Government debt accumulation is destabilizing and impoverishing. This policy implies higher taxes, which further divert limited capital from the private, productive sector to the government or political sector. Government spending programs are typically mired in embezzlement, kickbacks, overcharging, fraud, and other corrupt practices. Additionally, debt accumulation tends to lead to currency and credit printing, which causes its own set of economic distortions, instability, and impoverishment, exacerbating the detrimental effects of government deficit spending.

This approach reduces the availability of capital and talent for productive investment, stifles economic growth by crowding out the private sector, raises borrowing costs, leads to monetary inflation and heavier tax burdens, bloats the state bureaucracy—which also has its set of detrimental consequences for society, undermines innovation and productivity, depresses wages, exacerbates income-wealth inequality, and hinders economic development and prosperity.

In other words, a policy of government debt accumulation and deficit spending leads to economic distortions, instability, and deterioration, detrimentally impacting people’s lives. This policy aggravates the structural injustices of existing statist socioeconomic systems, resulting in unstable, repressed, and languishing economies.

3) Monetary inflation:

Government spending financed through currency and credit creation is also destabilizing and impoverishing. Fiat monetary systems cause far-reaching economic distortions, debase the nation’s currency, defraud people of their purchasing power, and drain their economic well-being. Fiat monetary practices of artificial currency, credit expansion, and interest rate manipulations lead to destructive boom-bust cycles, resulting in a fundamentally unsound, unstable, and distorted economy.

Also, continued currency creation to accommodate government deficit spending has historically resulted in hyperinflation, and present times are no different. Cases such as revolutionary France, Weimar Germany, Zimbabwe, and, more recently, Venezuela, among many other examples, demonstrate that government overspending is not only distorting, destabilizing, and impoverishing but can also be disastrous and utterly devastate the economy through hyperinflation. Persistent government deficit spending is the cause of every case of hyperinflation, the most severe form of economic collapse and destruction.

The immutable and universal fact is that government spending—whether financed through taxes, debt accumulation, or monetary inflation—distorts, destabilizes, and impoverishes the economy—albeit in varying degrees and paces depending on the economy’s structure, strength, and competitiveness.

More detrimentally, in the current statist world, most governments maintain the policies of heavy taxation, debt accumulation, and currency debasement simultaneously, compounding and substantially increasing the distorting, destabilizing, impoverishing, and tyrannical nature of government spending.

Continued deficit spending means debt accumulation, which means future taxes and monetary inflation. Heavy taxation and currency debasement destabilize and impoverish the economy, aggravating the ruinous effects of government debt accumulation and deficit spending. Government deficit spending is economically, sociologically, politically, demographically, and morally ruinous.

As noted in How Government Debt, Inflation, and Taxes Impoverish African Economies:

Government debt accumulation, monetary inflation, and heavy taxation are individually distortive, destabilizing, and impoverishing policies. Combined, these policies constitute a cruel and devastating triple-barreled weapon that viciously oppresses the people, confiscates their hard-earned purchasing power, drains their economic well-being, and impoverishes society. In other words, government (deficit) spending, currency debasement, and high taxes are the main policy choices that distort, destabilize, and impoverish economies in Africa and globally.

Colonial and neocolonial statist models have caused and continue to cause severe economic, sociological, political, and moral harm to African societies. African leaders must prioritize African economic development and prosperity by abandoning Western economics and embracing Africonomics.

A Destabilizing and Impoverishing Model

Government debt accumulation due to persistent deficit spending is a policy adopted by political figures of all stripes that destabilizes and impoverishes economies in Africa and worldwide. While excessive government debt levels are a global phenomenon fundamentally due to the Keynesian shift and fiat monetary systems, the detrimental impact of government debt and deficit spending varies significantly across countries.

More developed, diversified, and productive economies such as the United States, Japan, and others have the relative economic stability and strength to absorb the harmful effects of government debt accumulation and deficit spending for longer, with adverse effects manifesting insidiously.

In contrast, less stable, diversified, and competitive economies typically face the destabilizing and impoverishing effects of government debt accumulation more rapidly and destructively, sometimes with deadly consequences, as the recent nationwide anti-government protests over excessive taxation in Kenya have shown.

Whether financed through debt accumulation, monetary inflation, or heavier taxation, government deficit spending is confiscatory, distortive, destabilizing, and impoverishing. As remarked above, when combined, these policies constitute a cruel and devastating triple-barreled weapon that viciously oppresses the people, confiscates their hard-earned purchasing power, drains their economic well-being, and impoverishes society. Government deficit spending is the central policy that distorts, destabilizes, and impoverishes economies worldwide, particularly in Africa and other developing regions.

Despite being a feature of the current statist global order, African policymakers should avoid accumulating government debt and engaging in deficit spending. They must prioritize fiscal solvency, which is crucial for fostering stable and thriving African economies. Credit conditions have tightened and may continue for a while, even if the U.S. central bank were to embark on a (short-term) rate-cutting cycle. Belt and Road Initiative lending has also become restrained, effectively signaling that the Chinese loan bonanza is over.

Deteriorating economic conditions, both locally and globally, call for African governments to move away from the debt-based approach, a model consistently promoted by the West, which has proven ruinous, and pursue solvency and sound economic policies to facilitate African economic stability and prosperity. The current wave of government debt distress in Africa and increasing debt servicing costs call for a fundamentally different approach, one that prioritizes fiscal solvency and sound economic policies.

Figure 3: The global government debt situation is grim. Government debt levels have increased significantly since the 2008 global financial crisis, contributing to an increasingly precarious socioeconomic situation in most countries today.

Aggravating the perils and detrimental impact of government debt accumulation is that African countries face higher interest rates on their external debt than Western and other governments due to (real or perceived) political risk, regulatory uncertainty, and other factors. A 2024 report by the United Nations Trade and Development Commission, A World of Debt, observes:

Developing countries are now facing a growing and high cost of external debt. Debt service on external public debt reached US$ 365 billion in 2022, equivalent to 6.3% of export revenues. For comparison, the 1953 London Agreement on Germany’s war debt limited the amount of export revenues that could be spent on external debt servicing (public and private) to 5% to avoid undermining the recovery.

This dynamic is largely a result of high borrowing costs which increase the resources needed to pay creditors, making it difficult for developing countries to finance investments. Developing regions borrow at rates that are 2 to 4 times higher than those of the United States and 6 to 12 times higher than those of Germany.

Policymakers should take increasing debt servicing costs seriously as they significantly strain government finances and divert funds from essential services and sectors. In many developing nations, government debt crises quickly lead to economic instability and increased hardship. This policy leads to a destructive situation where the need for further borrowing to cover budget shortfalls and service the debt creates a cycle of more debt accumulation, currency printing, forex volatility, and higher taxes, worsening economic woes.

Many African countries are experiencing economic crises, with Zambia, Ghana, Ethiopia, Egypt, Tunisia, and Kenya grappling with debilitating debt and fiscal issues; some have partly defaulted on their Eurobond obligations. This destabilizing and impoverishing situation underscores the pressing need for African leaders to abandon the policy of government debt accumulation and deficit spending, which has unequivocally proven ruinous and continues to cause economic and sociopolitical turmoil.

In an article tellingly titled The Poisoned Chalice of Debt, economics professor Mark Aguiar, a mainstream economist associated with the IMF, highlights essential facts about government borrowing and deficit spending that are understood among free-market economists. Aguiar notes: “The data suggests that sovereign borrowing may actually leave citizens worse off, increasing volatility and lowering investment.” The longer conclusion reads:

The value of sovereign debt markets to the borrowing countries is ambiguous, whether viewed from the perspective of the data or quantitative models. With small differences over the rate of time discounting or risk-reward valuations, it may be that access to sovereign bond markets leaves economies worse off. The political economy distortions in many developing or emerging markets are severe enough that governmental access to global capital markets turns out to be counterproductive—increasing volatility and lowering investment. Even something like a lender of last resort [i.e., a central bank] that can unambiguously identify a panic may make things worse, not better.

Government deficit spending is insidiously destructive, leading to economic instability, deterioration, and social strife, among other detrimental consequences. This model typically results in government debt accumulation, monetary inflation, and a heavier tax burden, leading to an unstable, repressed, and troubled economy. In other words, these policies cause widespread economic distortions, turmoil, and impoverishment.

It is essential to recognize that most policymakers are politicians, and politicians are not angelic, altruistic beings with superior insight or foresight. They are regular human beings who are susceptible to fallibility and have their own interests and agendas. As a result, politicians in Africa and globally continue to overlook the growing debt problems as they pursue their own interests. It seems unlikely that the current government debt accumulation and deficit spending model will be abandoned anytime soon, as this policy benefits governments and their associated elites. However, this policy is extensively detrimental, especially for developing countries.

Policymakers are not addressing the central issue of government overspending; instead, they are resorting to accumulating more debt, monetary inflation, and imposing a heavier tax burden—a destabilizing and destructive policy combination.

While politically expedient, this approach causes economic instability and impoverishment and perpetuates structural injustices. The detrimental effects are evident as economic conditions deteriorate across the continent and globally. African policymakers should reject this ruinous model to facilitate stable and thriving economies. If African leaders are committed to fostering African economic development, prosperity, and independence, they must abandon government deficit spending and prioritize solvency and sound economic policies.

The South Asian nation of Sri Lanka has been facing a severe economic crisis since 2019, leading to sociopolitical unrest. Sri Lanka is a cautionary example, a clear warning against the current policies maintained by governments in Africa and elsewhere. The devastating economic collapse in Sri Lanka, primarily caused by excessive government debt and deficit spending combined with other statist policies, should serve as a reminder of the need for a shift in economic policies in other countries, particularly developing ones.

The world is in debt distress, and many nations are on a precarious fiscal path. African governments appear unwilling to acknowledge the dangers of excessive debt and deficit spending, insisting on this destabilizing and impoverishing approach, which drives economies toward a more unstable and worsening economic situation.

The current wave of government debt distress in Africa could result in a more widespread debt crisis (again) if the policy of debt-fueled government spending is not abandoned. Credit conditions have tightened and may remain so for a while. The Chinese loan bonanza is over as China’s economic crisis deepens and geopolitical tensions rise. In this precarious environment of restrictive lending, increased uncertainty, and mounting debt-servicing costs, even African economies not presently facing debt distress will face difficulties raising funds from international debt markets.

This underscores the need for adopting a fundamentally different approach to African economic development and prosperity, moving away from Western models and statism, which have proven repressive and ruinous. Africonomics provides a transformative economic model for fostering integrated, stable, and thriving African economies.

Hatab et al. remarks:

Nearly half of Africa’s economies are on the brink of debt distress. Unlike previous debt crises, the current one is characterised by a shift from multilateral to commercial and bilateral creditors, notably China, and the proliferation of Eurobonds. Pressured by heavy debt burdens, there is a risk that African governments divert funds from essential sectors such as education, health care and agriculture, causing a vicious cycle of stalled development, food insecurity and an elevated risk of socio-political instability.

Government deficit spending is a central economic issue that politicians should not continue to overlook. This policy destabilizes and impoverishes the economy, ruining lives. Even a large and advanced economy like the United States cannot maintain a policy of government debt accumulation and deficit spending without facing its ruinous consequences. The detrimental nature of debt-fueled government spending is increasingly evident in many countries worldwide.

Government debt accumulation is a destabilizing, impoverishing, and unjust policy that must be abandoned. African policymakers must adopt a market-driven approach to economic development to foster stable and thriving economies and achieve fiscal solvency and independence.

While the average debt-to-GDP ratio in Africa is currently at 60 percent, which is significantly lower than that of more developed countries and other regions, many of which have surpassed the 100 percent debt-to-GDP ratio, the destabilizing and impoverishing consequences of government indebtedness tend to be more severe and manifest faster in developing countries than in more developed ones due to structural economic deficiencies, making the need for a policy change in Africa more pressing.

The following are ways in which government debt accumulation and deficit spending distort, destabilize, and impoverish economies:

1. Debt-driven government spending perpetuates autocratic state-led development models, which have proven unable to transform Africa’s economic landscape. This approach has led to the prevalence of centralized, confiscatory, and repressive government systems typically propped by Western lending institutions. After more than 50 years of attempts, it is clear that the state-directed approach to economic development has failed to foster stable and prosperous African economies, resulting in chronically unstable and troubled economies facing debt distress and deteriorating economic conditions;
2. By perpetuating the autocratic state-led development model, government debt accumulation and deficit spending also perpetuate repression and structural injustices. This model traps Africa and other nations in a destabilizing and impoverishing cycle of recurring debt distress, rampant inflation, widespread corruption, economic instability, stagnation, mass unemployment, and other hardships. This model is further detrimental as it deters the adoption of sound economic policies that can foster integrated, stable, and thriving African economies. Government debt accumulation and deficit spending prolong the ruinous cycle of tyranny, poverty, instability, and dependence in which Western statist models entrap Africa;
3. Government debt accumulation and deficit spending, a model established worldwide by the West following the Keynesian shift and the fiat dollar standard, props up autocratic regimes, fueling economic, political, and intellectual repression in Africa and globally, which perpetuates widespread human suffering. This model also harms African and other nations by undermining the implementation of sound policies that foster economic development and prosperity. It delays pro-market, sound money, and free trade reforms, which are essential for a collaborative approach to economic development among African societies through regional and continental economic integration agreements such as The Abuja Treaty and, more recently, the African Continental Free Trade Area (AfCFTA).
   
   In other words, this policy exacerbates economic repression, hinders African economic development and prosperity, and sustains autocratic governments—a hallmark of post-neocolonial Africa. Government debt accumulation and deficit spending lead to oppression, injustice, impoverishment, and socioeconomic instability;
4. Increasing debt servicing costs worsen the situation of already tormented economies beset with currency depreciations, rampant inflation, forex volatility, stagnation, mass unemployment, and other longstanding issues created by the current autocratic approach of state-led development and state-managed economies. The detrimental impact of government debt accumulation is compounded by the fact that African countries pay much higher interest rates on their external debt than Western and other countries;
5. Debt-funded government spending also leads to monetary inflation (currency and credit printing), a policy that, as remarked much earlier, causes its own set of economic distortions, instability, impoverishment, and injustice—aggravating the detrimental impact of government deficit spending;
6. As the government accumulates debt, this policy becomes increasingly destabilizing and impoverishing. It also typically leads to more and higher taxes to support the growing debt load. This results in a more confiscatory and oppressive tax code. Heavy taxation is a detrimental policy that worsens economic troubles by further hampering economic development and prosperity, significantly contributing to economic deterioration. Hindered economic prosperity deepens poverty and poverty-related deaths. African countries have some of the highest maternal and infant mortality rates. These and other persistent poverty metrics affecting many countries highlight the disastrous failure of the state-directed economic development approach in Africa and elsewhere;
7. Like in other parts of the world, government spending in Africa is also plagued by embezzlement, overcharging, kickbacks, and other corrupt practices, which result in wasteful and counterproductive projects that benefit a few but for which society bears the costs. This problem is evident in examples such as Kenya’s infamous “railroad to nowhere” and the misuse of funds from Chinese loans in countries like Angola, DR Congo, and others during the Chinese loan bonanza period (c. 2001 to 2021). Government debt accumulation also tends to attract unscrupulous politicians who make unrealistic electoral promises to get to or stay in office, as well as special interest groups and opportunists seeking to profit from profligate government spending. This arrangement leads to continued debt accumulation, exacerbating economic instability, inequality, and other detrimental effects of government deficit spending;
8. Government deficit spending exacerbates income-wealth inequality. Government debt accumulation, fiat monetary policy, subsidies, bailouts, a bloated state bureaucracy, and other elements of contemporary statist socioeconomic systems benefit the wealthy, corporate interests, political elites, and their associates to the detriment of the majority. Some of the most economically unequal countries in the world are found in Africa, with dismaying wealth disparities. The severe economic disparities that characterize postcolonial Africa are one of the grievous consequences of statist and, in many cases, outright socialist policies seen in the neocolonial period. Many wealthy Africans are political figures or individuals with direct or indirect ties to their governments;
9. Government deficit spending harms present and future generations who bear the burden and hardships of this policy. This leads to a situation in which current and future generations suffer the consequences of government spending financed by debt accumulation amid an increasingly unstable, repressed, and languishing economy.
   
   The majority grapples with the loss of purchasing power due to currency debasement, price inflation, heavier taxes, intrusive and debilitating bureaucracy, repression, suppressed wages, higher cost of living, inferior goods and services, and other issues afflicting economies in Africa and worldwide. Meanwhile, political elites, corporate interests, and their associates benefit at the expense of the broader population, who face confiscatory and impoverishing policies;
10. Additionally, government debt is a crucial instrument in the Western strategic objective of neocolonial control and continued domination of Africa. It is used to entrap African nations in oppression, poverty, dependency, and subservience. While the West initially established and propagated the use of debt to assert the continuation of its power and control, other countries now utilize it to gain leverage over African states. Debt-funded government spending is economically, sociologically, geopolitically, and morally detrimental to African societies.

African policymakers must abandon the autocratic state-led development model, government debt accumulation, and deficit spending. These policies have proven destabilizing, repressive, and ruinous, having caused and continuing to cause economic turmoil, impoverishment, injustice, sociopolitical strife, and severe dependence. Adopting sound economic policies with a market-driven approach to economic development is essential to fostering stable and thriving economies and achieving African fiscal solvency and independence.

Conclusion

Many African countries face significant economic woes as another wave of debt distress sweeps the continent. While government debt accumulation and deficit spending have been normalized under the current statist global order, they have had a more debilitating impact on African and other developing countries due to their structural economic fragilities.

By insisting on debt-funded government spending and the autocratic state-directed development approach even as local and global crises mount, African policymakers further debilitate the continent's long-tormented economies, exacerbate economic deterioration and hardship, maintain repression, perpetuate dependence, impoverish the people, and make these economies more unstable and vulnerable to external shocks.

Debt-driven government spending is a detrimental policy that distorts, destabilizes, and impoverishes economies in Africa and worldwide. It reduces the availability of capital and talent for productive investment, stifles economic growth by crowding out the private sector, raises borrowing costs, and leads to monetary inflation and heavier tax burdens, creating unstable, repressed, and deteriorating economies. It also inflates state bureaucracy, fostering widespread corruption, undermining innovation and productivity, depressing wages, and hindering economic progress. These and other detrimental effects of government debt accumulation and deficit spending cause economic instability, impoverishment, and structural injustices.

The need for a fundamental shift is pressing in light of increasing debt distress, higher borrowing costs, economic crises, and worsening economic conditions locally and globally. Africonomics provides a fundamentally different approach, offering a transformative economic model to foster a new reality of integrated, stable, and thriving African economies—leading to a liberated and dignified postcolonial Africa.