Foreign debt relief efforts since President Moi’s era brought debt ratios down, but not to sustainable levels. Debt relief can be expected to spur economic growth by reversing the mechanism that make the debt overhang hamper economic growth. Debt relief cuts down on transaction costs, this is a more important factor than generally recognised. Debt relief will contribute to poverty reduction, the requirement to develop and implement the country-owned poverty reduction strategy will be an important and beneficial outcome of the initiative. Debt relief will improve local accountability and good governance, again in contrast to the side effects that aid flows often generate.

Source: The Star November 26, 2020 00:56 UTC