Title: Public debt, investment and development among emerging economies in Sub-Saharan Africa

Authors: Rexford Abaidoo; Elvis Kwame Agyapong; Kwame Fosu Boateng

Addresses: University of Maryland Eastern Shore, EASC Building Room 2094, Princess Anne, MD 21875, USA ' Department of Accounting and Finance, Ghana Institute of Management and Public Administration, P.O. Box AH50, Achimota, Greater Accra Region, Accra, Ghana ' Faculty of Accounting and Finance, University of Professional Studies, Accra, P.O. Box LG 149, Accra, Ghana

Abstract: This paper examines the extent to which public debt and strands of different sources of investments impact long-term development among Sub-Saharan African economies. Compared to related studies, development in this study is proxied by a more holistic index instead of GDP growth and its variants often employed in existing studies. Empirical analysis examining the key objectives of the study uses the continuously updating estimator (CUE) methodology by Hansen et al. (1996). Various empirical estimates show that public debt and government consumption expenditures exert significant negative impact on long-term development. The results further show that for the sub-region, effective governance and institutional effectiveness may not mitigate the negative impact of public debt on development. We also find that macroeconomic uncertainty exacerbates the negative impact of public debt on development among economies in the sub-region.

Keywords: public debt; investments; development; institutional quality; constantly updating estimator.

DOI: 10.1504/IJPP.2023.133623

International Journal of Public Policy, 2023 Vol.17 No.1/2, pp.118 - 138

Received: 07 Jul 2022
Accepted: 13 Jun 2023
Published online: 25 Sep 2023 *

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