Abstract:
ABSTRACT
This study examined the joint effects of external debt and capital expenditure
on economic growth. Using panel data of 37 SSA countries for the period of
2000–2020, the study found a negative relationship between external debt and
economic growth, capital expenditure and economic growth, but a positive
effect of the interaction between external debt and capital expenditure on
economic growth. Therefore, the study recommended that externally borrowed
funds by countries in SSA should be invested in productive ventures with
prudent management to ensure economic growth and development. More
importantly, governments of SSA should utilise fiscal and monetary policy
efficiently to ameliorate the over dependence on external borrowings in
financing their economic activities
