Title: External debt burden and economic growth in Sub-Saharan Africa countries: are there evidence for nonlinearity and sustainability?

Authors: Nosakhare Liberty Arodoye

Addresses: Department of Economics, Faculty of Social Sciences, University of Benin, Benin City, P.M.B 1154, Nigeria

Abstract: This study investigated the dynamic impacts as well as the threshold effects of external debt burden measures on economic growth of 25 SSA countries employing the panel auto regressive, panel fully modified ordinary least squares and other panel estimation techniques for the period that ranges from 2000 to 2018. The results from the estimations revealed significant short-run and long-run impacts of external debt on economic growth. There is a negative and significant relationship between external debt burden indicators and economic growth. The study shows that the turning points for external debt to income ratios ranges between 50%-90% while that of external debt to export ratio ranges between 180%-240%. The study recommended that SSA countries experiencing excessively high external debt stocks need to adopt reliable and dependable strategies to bringing about reduction in the rising external debt stock and debt service payments so that the crushing external indebtedness indicators would no longer have a deleterious effect on economic growth.

Keywords: autoregressive distributed lags; ARDL; fully modified ordinary least squares; FMOLS; debt; economic growth; Africa.

DOI: 10.1504/IJEPEE.2024.140192

International Journal of Economic Policy in Emerging Economies, 2024 Vol.20 No.1, pp.57 - 76

Accepted: 26 Apr 2022
Published online: 29 Jul 2024 *

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