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Reinhart, C. M., & Rogoff, K. S. (2010). Growth in a Time of Debt. American Economic Review, 100(2), 573-578.

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Article

The Impact of External Debt on Economic Growth: Evidence from Southern Africa

1School of Finance and Economics, Jiangsu University, Jiangsu Province, Zhenjiang P.R. China


Journal of Finance and Economics. 2020, Vol. 8 No. 3, 135-141
DOI: 10.12691/jfe-8-3-6
Copyright © 2020 Science and Education Publishing

Cite this paper:
Chilombo Stephania Mumba, Jiang Hong Li. The Impact of External Debt on Economic Growth: Evidence from Southern Africa. Journal of Finance and Economics. 2020; 8(3):135-141. doi: 10.12691/jfe-8-3-6.

Correspondence to: Chilombo  Stephania Mumba, School of Finance and Economics, Jiangsu University, Jiangsu Province, Zhenjiang P.R. China. Email: Stefmumba8@gmail.com

Abstract

An ARDL panel model is implored to explore the relationship between external debt and economic growth in 9 Southern African countries over the period 2000-2018. The empirical results show that short term external debt negatively affects economic growth over the long haul just as in the short run while long term external debt shows a negative connection with economic growth for the short run and a negative significant connection among debt and economic growth over the long haul insinuating the external funds gained are not being utilized for economic activities such as investment, capital formulation and technology. These discoveries demonstrate the requirement for policymakers in Southern Africa to not exclusively depend on external debt as a means to stimulate economic growth but should utilize aggressive techniques to improve and advance their economies.

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