External Debt Accumulation in Selected ECOWAS and SADC Countries: Implications for Economic Growth
The study examined the implication of external debt accumulation on economic growth in selected ECOWAS and SADC countries. Annual data on gross domestic product growth rate, capital, labour, external debt, exchange rates, inflation rates, and trade openness were sourced from the World Development Indicators (WDI)and country-specific data custodians agencies from 1990 to 2023. The study employed the fixed effect model, random effect model and fully modified ordinary least squares (FMOLS) in model estimation. The Hausman test, tested the fixed effect model more appropriate than the random effect model.. The study found that external debt accumulation had a negative and significant implication on economic growth in the selected ECOWAS and SADC countries during the study period. The finding implies that external debt accumulation hinders growth in ECOWAS and SADC countries. Based on the findings, the study recommended that the governments at all levels in ECOWAS and SADC countries should reduce external debt accumulation, and effectively use external debt to enhance economic growth.
Keywords: External Debt, Economic Growth, ECOWAS, SADC, Fixed Effect Model. FMOLS Gel Classification: E2, E3, G4, H2
