Africa's Development Financing Dilemma: Illusions of the Past and Challenges of the Future

Despite the various modalities recommended to alleviate the debt burden, and the IMF‐World Bank led structural adjustment programmes, the African countries South of the Sahara (ACSS) are faced everyday with more and more complex problems. Their standards of living deteriorate systematically and they seem to be in an eternal state of debt overhang. The survey of the existing vast literature and empirical studies indicate clearly that most of the African countries cannot cope with the existing debt burden, unless a drastic breakthrough is brought about in their development process. At the same time, neither the volume of their national savings nor the mechanisms of mobilising internal resources, within the prevailing economic environment and the existing structural and institutional setups, are adequate enough to satisfy their ever‐increasing financing needs. Hence, a twin dilemma: mounting difficulties of repayment of existing stock of debts and a noticeable slowdown in external financial flows on the one hand, and insufficiency of the domestically generated funds, on the other bedevil the African development scenario.