Abstract:
Sub-Saharan African countries have experienced a decline in its economic
growth rate due to delayed and still limited policy adjustments in the region,
with a consequent rise in public debt and deteriorating international reserves.
External debt and governance have been argued to impact a country’s
economic growth. The study assessed the role of country-level governance
structures in the relationship between external debt and economic growth
using a panel of 38 Sub-Saharan African countries for the period 1996-2016.
The study used Arrelano and Bond General Method of Moment dynamic panel
estimation technique. The results indicate that country-level governance
structures improve the utilization of external debt to boost economic growth in
Sub-Saharan African countries. The study concludes that strong country-level
governance structures (rule of law, voice and accountability, political stability
and absence of violence/terrorism, regulatory quality, government
effectiveness and control of corruption) would ensure efficient utilization of
external debt for the purpose of increasing economic growth in Sub-Saharan
African countries
