By: Oseji Akpors Sunday, Olawunmi Omitogun, G. Bukonla Osisanwo
Pages: 264–283, Volume: 3, Number: 1
Published by: AEFUNAI Journal of Economics, Finance and Development Studies, Alex Ekwueme Federal University, Ndufu-Alike, 2/1/2026, 2026
ISSN (Electronic): 2536-6742
DOI:
Asymmetric Effect of External Debt on Economic Growth in Sub-Saharan Africa
Abstract:
Economic growth in Sub-Saharan Africa (SSA) was shaped by rising external debt, but its effects were not uniform. While borrowing supported development when effectively managed, excessive debt often generated debt overhang that undermined growth. This study aimed to investigate the asymmetric impact of external debt on economic growth in SSA, focusing on whether increases and decreases in debt exerted different influences, an aspect overlooked in much of the linear-based literature. Panel data for selected SSA countries over the period 1996-2023 were analysed using the Nonlinear Autoregressive Distributed Lag (NARDL) model, which accounted for cross-sectional dependence and mixed integration orders. Findings show that debt increases have a more significant negative impact on growth than the positive impact of debt reductions, confirming the presence of debt overhang effects.
Keywords: External debt, Economic growth, Asymmetric effects, Debt overhang, SSA
How to Cite
Sunday, O. A., Omitogun, O., & Osisanwo, G. B. (2026). Asymmetric Effect of External Debt on Economic Growth in Sub-Saharan Africa. AEFUNAI Journal of Economics, Finance and Development Studies (AEFUNAI-JEFDS), Vol. 3(1), 264–283.
Creative Commons Attribution 4.0 International License (CC BY 4.0)
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