DEBTS AND ECONOMIC DEVELOPMENT OF NATIONS

ABSTRACT

The study examines the impact of debt on the economic development of selected subSaharan Africa nations for the period of 2000 - 2022 Using ex-post facto research design method. The outcome of the study revealed that debt to GDP ratio has a significant negative impact on HDI, debt service ratio has a significant positive impact among SSA countries. It is also show that debt to GDP ratio tends to reduce per capita GDP growth among SSA countries, while debt service ratio directly enhances the growth, debt service ratio, rather than overall debt burden that limits domestic investment among SSA countries. This implies that debt crowding out effect holds for investment among the SSA countries. The study however recommends that there is need for both governments to strive to reduce debt accumulation, especially in the long run. A major way for achieving this outcome is through increasing all forms of government revenue by increasing sources and outlets for collection. Also, long term effects of external debt must always be put into perspective each time such debt is being raised in the economies. Servicing conditions must be made to be mild in order to reduce the crowding out effects on investment among SSA countries.