The Effect of Foreign Debt on Economic Growth in Sub-Saharan African Sub-Regions

Abstract

The main objective of this paper is to verify the effect of foreign debt on economic growth in sub-Saharan African sub-regions from 1980 to 2017. The paper applies the Generalized Method of Moments (GMM) with robust standard deviations using the Lewbel's estimator (2012). Results indicate that foreign debt significantly enhances growth in four zones (SADC, EAC, CEMAC and ECOWAS) with different bearable thresholds. This seems to suggest that creditors may be aware that countries do not exceed their bearable threshold at least at regional level.

Investment Indicators and Economic Growth in Nigeria: A Systematic Review

“…Following the lead of Omojolaibi et al [44], Kengdo et al [45] and Babu et al [9], the study modeled economic growth proxy by RGDP as a function of disaggregated forms of investment and the afore-mentioned control variables. In accordance with the literature and the study's objectives, an Autoregressive Distributed Lag (ARDL) model with modifications, presented in its general form as an unrestricted errorcorrection model (UECM) regression from which all tests and estimations are conducted was devised and specified as follows:…”