TOPIC: The effect of external debt on economic growth: Evidence from 10 African countries

This study delves into the intricate relationship between external debt and economic growth in ten African countries: Ethiopia, Ghana, South Africa, Botswana, Burundi, Cameroon, Côte d′Ivoire, Zambia, Lesotho, and Mauritius. By examining data from 2000 to 2022, this research emphasizes the significance of government effectiveness in harnessing external debt to boost economic growth. Employing the Fixed-Effect Driscoll-Kraay Estimation technique, the analysis accounts for potential statistical challenges such as heteroscedasticity, autocorrelation, and cross-sectional dependence. The findings reveal a positive correlation between external debt, government effectiveness, and economic growth. However, inflation emerges as a significant negative effect on economic growth. The study emphasizes the crucial role of effective governance in optimizing the benefits of external debt. It recommends that African governments prioritize reforms aimed at enhancing financial management and public administration. By strategically utilizing external loans, these nations can stimulate economic growth and achieve sustainable development.