Regulating Debts in Developing Countries

Regulating Debts in Developing Countries
For a long time, overseas debts were a vital source of funding for developing countries, particularly Africa and Asia. Most African countries seek additional funding from international agencies such as the IMF and the World Bank to maintain economic stability and even natural disasters like drought and hunger. The debt is then passed down through the generations, from one president to the next.
A new government should impose measures to prevent the country from having extra debts. Some of the measures include; increasing accountability for both the borrower and the lender, introducing better ways of dealing with crises and natural calamities, and boosting alternatives to borrowing. To manage the economy, the government requires funds. It should, however, always account for the amount borrowed. According to research, most debts are unaccounted for and so exploited. The lender should increase interest rates on a borrower who does not account for the money. As a result, the borrowers who want to misappropriate the funds will vanish. As a result, there will be fewer loans, and their uses will be more suitable, resulting in a developing economy that wi...