The Impact of External Debt on Economic Growth in Sub-Saharan Africa
Journal Title: Academic Journal of Economic Studies - Year 2018, Vol 4, Issue 4
Abstract
In theory the underlying logic entails that, a country should borrow as long as the capital thus acquired produces a rate of return that is higher than the cost of the foreign borrowing. In that event, the economy of the borrowing country will result in increased capacity coupled with expanding output via the aid of foreign savings. With countries in Sub-Saharan Africa adopting an economic development strategy that significantly relies on external financing, the study sets out with the aim to uncover the existent relationship between external debt burden and economic growth for the period 1990 to 2016 in 38 selected Sub-Saharan countries. To do this, panel data econometric techniques of Generalized Method of Moments was employed to evaluate the relationship. The results from the generalized method of moment indicated that, economies of Sub-Saharan Africa are negatively affected by external debt. Also, external debt was found to be more deleterious to middle income economies compared to their counterparts low income economies.
Authors and Affiliations
Muhia John Gachunga, Yasin Kuso
Keywords
Related Articles
- EP ID EP425054
- DOI -
- Views 152
- Downloads 0
Wood Production in the Central African Republic’s Economy: An Error Correction Model (ECM) Analysis
This work analyzes the effect of forest on the economy of Central African Republic, using the data from secondary source within the period of 1970-2015. The study employed error correction model (ECM) as econometric meth...
Analysis of Influence of Quality of Service and Quality of Products on Loyalty of Members with Member Satisfaction as Intervening Variable in Loan and Save Cooperative Nasari Branch Office of Medan
The purpose of this study is to provide proposed actions or steps to solve problems related to service quality and product quality to increase the loyalty of KSP members Nasari Medan branch with member satisfaction as in...
The Accounting Standardization System in Portugal and Its First-Time Adoption Effects in the Olive and Cork Tree Cultures
This study examines the quantitative impact of the first-time adoption of the Portuguese Accounting Standardization System on individual annual reports of Portuguese unlisted companies in the cork and olive tree culture...
Quantification Satisfaction Airline Passengers
In the last period we are witnessing numerous limited activities of the flights of various air transport companies or even resounding bankruptcies. This is due mainly to the fall in the number of passengers, caused by a...
Impact of International Liquidity on Foreign Exchange Rate in Nigeria: A Comparative Crosscheck
This paper investigated the impact of international liquidity on exchange rates in Nigeria. Monthly data was sourced from the CBN statistical bulletin of 2017 series from 1981M1 to 2017M12. Exchange rate was made the reg...