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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Foreign debt and Africa's growth process
Author:Busari, Dipo T.ISNI
Periodical:The Nigerian Journal of Economic and Social Studies
Geographic term:Subsaharan Africa
Subjects:external debt
economic development
Abstract:This paper examines the effects of external indebtedness on sub-Saharan Africa's growth process using two samples. The first sample consists of five heavily indebted countries while the second sample consists of five countries with a low level of debt. The study uses the extreme bound analysis (EBA) and dynamic panel external debt and growth in the samples. The sample period covers 1982-1998. Data on the debt variables are obtained from the World Bank Debt Tables while other data are derived from the IMF publication 'International financial statistics' and publications of the African Development Bank. The study finds a robust negative relationship between the various debt measures and growth in the two samples, suggesting that external debt depresses growth in Africa. Further observed are the significance of fiscal and monetary variables in the growth process of African countries. The study suggests that, for sub-Saharan African countries to resume sustainable growth and development, the debt crisis in Africa will have to be addressed urgently. Macroeconomic management needs to be improved and the international lending institutions are required to play a prominent role in this regard. The study argues for debt cancellation for African countries. Bibliogr., notes, ref., sum. [Journal abstract]