External Debt and Economic Growth Nexus in Sub-Saharan Africa: the Role of Institutional Quality
Journal Title: Journal of Economics, Finance and Management Studies - Year 2024, Vol 7, Issue 06
Abstract
Sub-Saharan African (SSA) countries have recently embarked on an economic growth trajectory which is characterized by ambitious national development aspirations. The ability of the SSA economies to generate sufficient domestic revenues to spur their desired economic growth is limited resulting into fiscal deficits. External Debt has provided alternatives to the fiscal deficits prevalent in SSA economies. Dividends from external debt investments have been unevenly witnessed among the SSA countries. Regions with better institutional quality continue to reap considerable dividends from external debt investments while SSA economies continue to accumulate external debt with sluggish economic performance. This study made use of the Generalized Method of Moments (GMM) to examine the role played by institutional quality on the nexus between external debt and economic growth on a panel of 28 SSA countries over the period 2005 - 2021. Empirical results indicate that institutional quality influences a positive and significant relation between external debt and economic growth. Policy makers in SSA countries should therefore strive to improve on institutional quality in regard to external debt management in order to reap more economic benefits from external debt
Authors and Affiliations
R. Mugobera , D. Mahebe
Keywords
Related Articles
- EP ID EP737901
- DOI 10.47191/jefms/v7-i6-39
- Views 9
- Downloads 0
Foreign Dependency and Economic Growth Nexus in Kenya
Foreign dependency is an economic phenomenon, which is characterized by asymmetrical benefits, favouring specific countries at the expense of others, and impeding the growth potential of dependent economies. The main obj...
Retail Investor’s Investment Decision Criterion to Invest in IPOs - A Study
Initial Public Offering is a kind of public offering by the companies to generate the funds from primary market for the first time. Individual investors are becoming rational to investment in Initial Public Offerings (IP...
The Effect of Local Government Characteristics And Audit Findings on Financial Performance With Responsibility Level Moderation
Purpose : to examine the effect of local governments characteristics and the findings of the investigation on financial performance moderated by the level of responsiveness of local governments.. Methodology: population...
An Important Factor in Solving the Poor Problem
This article highlights the role of farms in improving the welfare of the population, in particular, in Namangan region, the specifics of the specifics of the solution of the problem of poverty through the development o...
The Moderation Role of Company Size in Increasing Profitability in the Sector Banking
Profitability has an important meaning in an effort to maintain the continuity of the company, because profitability shows whether the business entity has good prospects in the future. Based on data obtained in the annua...