23/09/2026
Fiscal policy plays an important role in how governments respond to economic challenges, but fiscal rules can also affect the resources available to governments and their ability to respond to changing needs.
A recent research publication by Mr. Gift Matabwa and DoE's Dr. Lucius Cassim and Ms. Bertha Nguluwe examines the relationship between fiscal rules and fiscal space in Sub-Saharan African economies from 1980 to 2020 in “Do Fiscal Rules Limit Fiscal Space?”.
Key findings indicate that:
1. Fiscal rules reduce fiscal space in Sub-Saharan African economies, contrary to conventional expectations.
2. Higher public debt increases perceived sovereign default risk and risk premia, raising borrowing costs.
3. Higher borrowing costs and tighter external financing conditions reduce the level of sustainable public debt, consequently limiting fiscal space.
The study contributes to the understanding of fiscal policy in developing economies by highlighting how sovereign risk and persistent debt distress can influence the relationship between fiscal rules and fiscal space.
We congratulate Mr. Gift Matabwa, Dr. Lucius Cassim and Ms. Bertha Nguluwe on this important contribution to research and policy discussions on fiscal policy, public debt and economic management in Sub-Saharan Africa.
Gowokani Chijere