External Debt Stock, Real Exchange Rate and Economic Growth in Sub Saharan Africa: A System GMM Approach

Abstract

This study investigate the impact of external debt on economic growth in Sub Saharan African (SSA) countries, the study sampled 13 SSA countries using the System GMM estimation for the period 1999 to 2019, the study period is justified owing to economic rigidities and shocks that has continued to bedevil the SSA region. The result of the study revealed that the lagged value of economic growth has a positive and statistical significant effect on current growth.  A positive but non-significant relationship exists between external debt and economic growth in the short run. Gross fixed capital formation had a positive but non-significant relationship with economic growth. The coefficient exchange rate revealed a negative and statistical significant relationship on economic growth.