Impact of Debt Management Strategy on Eeconomic Growth of Sub-Saharan Africa: a Search for an Appropriate Strategy
Saleh, A. S.
Abstract:
To achieve a meaningful growth most countries in the sub-Saharan Africa may find it difficult to escape borrowing. It is on record that many of these countries have lived literally on debt, debt relief and aid from more developed economies. The effect of debt in most of the sub-Saharan was found to be negative on growth (Okosode and Isedu, 2008; Adegbite et al, 2008). Several works have supported the argument however using very insignificant samples; and few of those are from the sub-Saharan Africa (Fosu, 1996). The negative impact of debt on economic growth could be as a result of factors other than debt. Issues of corruption, mismanagement and the strategy of managing sovereign debts are often ignored. It is believed that an effective debt management strategy is a relevant factor for economic growth. The objective of this work is to determine the effect of a debt management strategy employed by a country on economic growth of such a nation. The work will employ the use of the least square regression analysis to establish the relationship between the variable of debt management (DeM) and economic growth. A Time series debt data was generated from the World Bank Economic Policy and External Debt data bank. Total external reserves as a percentage of external debt (TOTEXRES) represents economic growth in the model, and debt management (DeM) was computed from the World Bank’s debt management performance assessment (DeMPA) and the joint World Bank/IMF debt sustainability analysis (DSA) reports. It was expected that an effective debt management strategy would be positively related to economic growth.
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APA citation
- Saleh, A. S. (2013). Impact of Debt Management Strategy on Eeconomic Growth of Sub-Saharan Africa: a Search for an Appropriate Strategy. International Journal of Business and Management, 1(1), 1–17.