External Debt in Sub-Saharan Africa: A Five Country Case Study on External Lending

Author

• Andres Ramirez, Chapman UniversityFollow

Date of Award

Summer 8-2026

Document Type

Thesis

Degree Name

Master of Arts (MA)

Department

International Studies

First Advisor

Crystal Murphy

Second Advisor

Andrea Molle

Third Advisor

Minju Kwon

Abstract

This thesis examines China as a new external lender to Africa and analyzes if their large infrastructure loans are leading developing countries into debt distress, compared to Multilateral and Commercial Private financing. A regression analysis is run on a 10-year data set, 2014-2024, and analyzes the external debt service-to-revenue ratio, relative to the external debt stock by lender, across a panel of five East and West African economies, Kenya, Ethiopia, Ivory Coast, Rwanda, and Benin. The empirical findings in the analysis shows that commercial private debt causes the most strain on a country’s external debt service to revenue ratio, but it does not lead to debt distress on its own. This research finds that a developing country will experience debt distress if they take large singular infrastructure loans from China, such as Kenya and Ethiopia’s Standard Gauge Railway, that cost the countries $5b each to construct. Taking large infrastructure loans from China, leads to more expensive commercial/private borrowing with shorter maturities, to cover financial shortfalls to pay off Chinese interest and principal. This thesis serves as a good case study for further research on dependency theory and neo-colonialism, in relation to unsustainable external debt. Historically it is Western institutions, such as the IMF and World Bank that led to heavily indebted countries and cycles of expensive debt in Sub Saharan Africa, but it appears that global private creditors and China are now stepping into the “Core” role of the dependency theory framework.

Creative Commons License

This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Recommended Citation

Ramirez, A. (2026). External debt in sub-Saharan Africa: A five country case study on external lending [Master's thesis]. Chapman University Digital Commons. https://doi.org/10.36837/chapman.000760