The impact of public debt service on economic growth: empirical evidence from Zambia

Saungweme, Talknice; Odhiambo, Nicholas M.

doi:10.1504/ijrm.2020.109414

Cited by 4 publications

(4 citation statements)

References 42 publications

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“…It implies that external debt adversely affected the economic growth of Nigeria. Saungweme and Odhiambo (2020) inferred that both domestic and foreign borrowing left the adverse impacts on Zimbabwe economy. The Zimbabwe economy is exposed to the serious consequences as both sources of debt has been nosedived to sustain economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

Domestic Debt and Economic Growth Sustainability Nexus: An Empirical Analysis of Pakistan Economy

Ali¹

2022

PSSR

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This study is an attempt to make an assessment for the domestic debt and sustainable economic growth nexus for the Pakistan economy. In the absence of the forthcoming sustenance of the domestic debt, internal financial mobilization may prove to be a profligate strategy. This research investigates that either domestic debt has been a catalyst to foster the economic growth sustainability or otherwise. The time series data is considered spanning from 1990 to 2021. To obtain the empirical evidence of the research, Johansen Conintegration, Auto Regressive Lag Model (ARDL) and Granger Causality techniques are applied. The findings of model 1, imply the long run association among the variables. Finding shows that historical pattern of the fiscal deficit and exchange rate positively influence the current level of domestic debt whereas interest rate leaves positive footprints on the domestic debt as well. Findings of the Model 2, explain that domestic debt is not contributing to achieve the sustainable economic growth and necessitate adequate handling while keeping in view the future generations.

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Section: Literature Reviewmentioning

confidence: 99%

Domestic Debt and Economic Growth Sustainability Nexus: An Empirical Analysis of Pakistan Economy

Ali¹

2022

PSSR

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“…A recent study by Saungweme & Odhiambo (2020) ascertained the impact of national debt on economic growth from 1970 to 2017 in Zimbabwe. By applying the Autoregressive Distributed Lag (ARDL) for the data analysis, it was observed that economic growth was negatively affected by both domestic and external debt in the long and short run.…”

Section: Studies By Developing Countriesmentioning

confidence: 99%

Impact of National Debt Burden on Economic Stability in Nigeria

Onyele

Nwadike

2021

Economics and Business

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The study argues that national debt becomes a burden when debt overhang is rising, a foreign reserve is inadequate to cover short-term external debt and government revenue is inadequate for debt servicing. This paper investigates the impact of national debt burden on economic stability in Nigeria. Data spanning from 1981 to 2019 have been collated from the World Development Indicators and Central Bank of Nigeria Statistical Bulletin, 2019 edition. Consequently, the variables used to measure debt burden are total debt-to-GDP ratio (debt overhang), short-term external debt-to-reserves ratio (reserve adequacy) and debt service cost-to-government revenue ratio (revenue adequacy) with exchange rate as a control variable, while economic stability is measured with real GDP growth rate. The Autoregressive Distributed Lag (ARDL) model is used for the analysis since the variables are stationary at both levels and first difference. The ARDL estimation shows that the explanatory variables collectively cause a diminishing impact on economic stability in the long run with revenue adequacy having a negative and significant impact. In the short run, all the components of debt burden, except debt overhang, have a negative and significant impact on economic stability. Under this circumstance, exchange rate has a positive and significant impact on economic stability in the long run.

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“…The evolution of Zimbabwe's public debt dynamics can be traced to 1980 when the country attained political independence. From the 1980s to about 1995, Zimbabwe had unrestricted access to domestic and international capital markets, which contributed to growth in public sector indebtedness (Saungweme, Odhiambo, 2020). However, by the late 1990s, the country was in a serious debt distress, resulting in a massive accumulation of both domestic and foreign debt arrears (Jones, 2011).…”

Section: Public Debt and Inflation Dynamics In Zimbabwementioning

confidence: 99%

“…Whereas other previous papers have attempted to examine the relationship between public debt and economic growth in Zimbabwe (Saungweme, Odhiambo, 2020;Mupunga, Le Roux, 2014;2015), none has investigated the possible impact of public debt on inflation. A related paper by Makochekanwa (2010) focused on budget deficits and inflation in Zimbabwe, excluding the impact of public debt dynamics on inflationary process in the country.…”

Section: Introductionmentioning

confidence: 99%

Public debt and inflation dynamics: Empirical evidence from Zimbabwe

Saungweme

Odhiambo

2021

Croatian Review of Economic, Business and Social Statistics

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The study seeks to empirically test the hypothesis that public debt has a significant influence on inflation in Zimbabwe, covering the period 1980-2020. The study was motivated by recent trends in public debt and domestic inflation in Zimbabwe, and the need to guide debt-inflation related policy. These latest trends have started to ring alarming bells, which raises questions on the effectiveness of fiscal and monetary policies in bringing macroeconomic stability in the country. Applying the Autoregressive Distributed Lag (ARDL) bounds testing procedure to cointegration and an error correction mechanism (ECM), expanded by incorporating structural breaks, the study finds evidence in support of positive and significant impact of public debt on inflation dynamics in Zimbabwe, particularly in the long run. Based on the findings, public debt dynamics matter for inflation process in Zimbabwe. That is, fiscal policy can be considered to be an important determinant of the effectiveness of monetary policy in Zimbabwe. Therefore, the government should be mindful of increases in public debt as this was found to be inflationary.

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The impact of public debt service on economic growth: empirical evidence from Zambia

Cited by 4 publications

References 42 publications

Domestic Debt and Economic Growth Sustainability Nexus: An Empirical Analysis of Pakistan Economy

Domestic Debt and Economic Growth Sustainability Nexus: An Empirical Analysis of Pakistan Economy

Impact of National Debt Burden on Economic Stability in Nigeria

Public debt and inflation dynamics: Empirical evidence from Zimbabwe

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