Conference Paper
Teetering on the Brink of Debt and Hunger: Empirical Examination of the Linkages between External Debt and Food Security in Africa
No.
ERF_31_EN139
Publisher
ERF
Date
March, 2025
Topic
Q5. Environmental Economics
Debt accumulation and food insecurity are two critical challenges confronting low- and middle-income countries, yet there is limited research on how external debt affects food security, particularly in Africa. This study analyzes balanced panel data from 32 African countries over a decade (2012–2022) to assess the impact of external debt stock and debt servicing on food security. The results generally support the hypothesis that “the dose makes the poison,” showing that higher external debt stock undermines food security, though its effects vary across different dimensions of food security. Specifically, while debt stock significantly reduces food affordability, and quality and safety, it slightly improves food sustainability and adaptability. We also found that higher debt stock contributes to increased rates of child stunting, indicating adverse long-term nutritional effects. Interestingly, external debt servicing showed a negative but statistically insignificant effect on overall food security. However, the magnitude of its impact on various dimensions of food security (availability, affordability, and sustainability) and child stunting is considerably larger than that of debt stock. Disaggregated analysis reveals that the source of external debt matters: multilateral loans negatively impact food security and increase child stunting, whereas private and bilateral loans have opposite effects. Notably, the adverse effects of external debt on food security persist across income levels and degrees of food-import dependency, although with varying impacts. These findings highlight the complex relationship between external debt and food security in Africa. Policymakers should carefully balance borrowing decisions with robust debt management strategies, and direct borrowed funds towards sustainability-enhancing projects and productive investments that enhance food security and reduce malnutrition to the mitigate negative effects on vulnerable populations, especially children.
Research Fellows
Assem Abu Hatab
Professor and a Senior Development Economist, Nordic...
Authors
Emmanuel Orkoh
Postdoctoral Researcher, Nordic Africa Institute, Uppsala University