Dynamic Relations Between Public External Debt and Economic Growth in African Countries: A Curse or Blessing?
This paper used the Johansen Cointegration test and system Generalised Method of Moments (sysGMM) to examine the dynamic relations between external debt and economic growth in 43 African countries over the period 2001–2018. The study used data from World Development Indicators (WDI) as published by...
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| Format: | Article |
| Language: | English |
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Elsevier
2020-09-01
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| Series: | Journal of Open Innovation: Technology, Market and Complexity |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2199-8531/6/3/88 |
| _version_ | 1797427824967024640 |
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| author | Benjamin Ighodalo Ehikioya Alexander Ehimare Omankhanlen Godswill Osagie Osuma Ofe Iwiyisi Inua |
| author_facet | Benjamin Ighodalo Ehikioya Alexander Ehimare Omankhanlen Godswill Osagie Osuma Ofe Iwiyisi Inua |
| author_sort | Benjamin Ighodalo Ehikioya |
| collection | DOAJ |
| description | This paper used the Johansen Cointegration test and system Generalised Method of Moments (sysGMM) to examine the dynamic relations between external debt and economic growth in 43 African countries over the period 2001–2018. The study used data from World Development Indicators (WDI) as published by the World Bank and the World Economic Outlook database as provided by the International Monetary Finance (IMF). The study provides an understanding of how the importance of external debt could be short-lived due to its misapplication. The result reveals evidence to support a long-run equilibrium relationship between external debt and economic growth in Africa. The result demonstrates that beyond a specific capacity, the short-run converges to equilibrium in the long-run and external debt would start to have a deteriorating impact on economic growth in Africa. The findings of this study reinforce the need for policymakers to ensure proper application of external debt on economic activities that would lead to sustained long-term economic performance. Moreover, the government and development partners must put in place a monitoring mechanism to ensure the efficient use of borrowed funds. |
| first_indexed | 2024-03-09T08:49:25Z |
| format | Article |
| id | doaj.art-e1671a5c95ae4b8a999e4bc969dc11c1 |
| institution | Directory Open Access Journal |
| issn | 2199-8531 |
| language | English |
| last_indexed | 2024-03-09T08:49:25Z |
| publishDate | 2020-09-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Journal of Open Innovation: Technology, Market and Complexity |
| spelling | doaj.art-e1671a5c95ae4b8a999e4bc969dc11c12023-12-02T14:44:16ZengElsevierJournal of Open Innovation: Technology, Market and Complexity2199-85312020-09-016888810.3390/joitmc6030088Dynamic Relations Between Public External Debt and Economic Growth in African Countries: A Curse or Blessing?Benjamin Ighodalo Ehikioya0Alexander Ehimare Omankhanlen1Godswill Osagie Osuma2Ofe Iwiyisi Inua3Department of Banking and Finance, College of Business and Social Sciences, Covenant University, Ota PMB 1023, NigeriaDepartment of Banking and Finance, College of Business and Social Sciences, Covenant University, Ota PMB 1023, NigeriaDepartment of Banking and Finance, College of Business and Social Sciences, Covenant University, Ota PMB 1023, NigeriaDepartment of Financial Studies, Faculty of Management Sciences, National Open University of Nigeria, Abuja PMB 80067, NigeriaThis paper used the Johansen Cointegration test and system Generalised Method of Moments (sysGMM) to examine the dynamic relations between external debt and economic growth in 43 African countries over the period 2001–2018. The study used data from World Development Indicators (WDI) as published by the World Bank and the World Economic Outlook database as provided by the International Monetary Finance (IMF). The study provides an understanding of how the importance of external debt could be short-lived due to its misapplication. The result reveals evidence to support a long-run equilibrium relationship between external debt and economic growth in Africa. The result demonstrates that beyond a specific capacity, the short-run converges to equilibrium in the long-run and external debt would start to have a deteriorating impact on economic growth in Africa. The findings of this study reinforce the need for policymakers to ensure proper application of external debt on economic activities that would lead to sustained long-term economic performance. Moreover, the government and development partners must put in place a monitoring mechanism to ensure the efficient use of borrowed funds.https://www.mdpi.com/2199-8531/6/3/88external debtgovernment investmenteconomic growthpolicyAfrica |
| spellingShingle | Benjamin Ighodalo Ehikioya Alexander Ehimare Omankhanlen Godswill Osagie Osuma Ofe Iwiyisi Inua Dynamic Relations Between Public External Debt and Economic Growth in African Countries: A Curse or Blessing? Journal of Open Innovation: Technology, Market and Complexity external debt government investment economic growth policy Africa |
| title | Dynamic Relations Between Public External Debt and Economic Growth in African Countries: A Curse or Blessing? |
| title_full | Dynamic Relations Between Public External Debt and Economic Growth in African Countries: A Curse or Blessing? |
| title_fullStr | Dynamic Relations Between Public External Debt and Economic Growth in African Countries: A Curse or Blessing? |
| title_full_unstemmed | Dynamic Relations Between Public External Debt and Economic Growth in African Countries: A Curse or Blessing? |
| title_short | Dynamic Relations Between Public External Debt and Economic Growth in African Countries: A Curse or Blessing? |
| title_sort | dynamic relations between public external debt and economic growth in african countries a curse or blessing |
| topic | external debt government investment economic growth policy Africa |
| url | https://www.mdpi.com/2199-8531/6/3/88 |
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