Abstract

This study empirically investigated the relationship between external debt and economic development of Sudan. The study covered the period from 1970 to 2011 and adopted empirical investigation and causality research approach. Data on economic development were used in establishing the relationship and the degree of significance. Regression technique was used in order to establish the nature and degree of the relationship between the variables. The study found that GDP per capita, government final consumption, exports can improve with external debt borrowing; while gross domestic saving, imports (in the first period) in the country will be reduced with external debt borrowing; although not significantly. The imports in Sudan will simultaneously reduce when more external debt are borrowed as established by the study. The study, therefore, inferred that external debt in Sudan has made both positive and negative contribution to the economic development of the country during the period covered by this study.

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