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

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  • Arsène Aurelien NJAMEN KENGDO

    (University of Dschang, Faculty of Economics and Management/CERME, Dschang, Cameroon)

  • Luc NEMBOT NDEFFO

    (University of Dschang, Faculty of Economics and Management/CERME, Dschang, Cameroon)

  • Désiré AVOM

    (University of Dschang, Faculty of Economics and Management/CERME, Dschang, Cameroon)

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.

Suggested Citation

  • Arsène Aurelien NJAMEN KENGDO & Luc NEMBOT NDEFFO & Désiré AVOM, 2020. "The Effect of Foreign Debt on Economic Growth in Sub-Saharan African Sub-Regions," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 109-114.
    • Handle: RePEc:ddj:fseeai:y:2020:i:1:p:109-114
    DOI: https://doi.org/10.35219/eai1584040988
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    References listed on IDEAS

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    1. Daniel Cohen & Jeffrey Sachs, 1991. "Growth and External Debt Under Risk of Debt Repudiation," NBER Chapters, in: International Volatility and Economic Growth: The First Ten Years of The International Seminar on Macroeconomics, pages 437-472, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Nchofoung, Tii N., 2022. "Trade shocks and labour market resilience in Sub-Saharan Africa: Does the franc zone response differently?," International Economics, Elsevier, vol. 169(C), pages 161-174.

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    Keywords

    Foreign debt; Lewbel’s estimator;

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