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The Impact of Selected Economic Indicators on the Debt Levels of African Countries

Author

Listed:
  • Nii Osro Tackie

    (Tuskegee University)

  • Ntam Baharanyi

    (Tuskegee University)

  • Arthur Siaway

    (Tuskegee University)

Abstract

This paper assesses the effect of selected economic variables on the debt situation of African countries. The data for the study were obtained from World Bank and International Monetary Fund (IMF) sources covering the period 1960-89. The data were analyzed by multiple regression analysis using the model expressing debt repayment as a function of debt stock, import expenditure, gross national product per capita, and international reserves. The results indicated that the model had good structural quality as reflected the generally high explanatory power, and the fact that debt stock, import expenditure, gross national product per capita, and international reserves had a significant effect on debt repayment for almost all the countries. Most of the elasticities were greater than 1.00, except for the international reserves elasticities which tended to be inelastic in general. The results suggest that the countries will have to implement policies geared towards increasing GNP and trade opportunities which improve the balance of trade and strengthen their debt repayment capacity.

Suggested Citation

  • Nii Osro Tackie & Ntam Baharanyi & Arthur Siaway, 1996. "The Impact of Selected Economic Indicators on the Debt Levels of African Countries," Journal of African Development, African Finance and Economic Association (AFEA), vol. 2(1), pages 23-36.
    • Handle: RePEc:afe:journl:v:3:y:1996:i:1:p:23-36
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