Exploring the Dynamic Link Between Trade Openness, External Debt, and Economic Growth in Sub-Saharan Africa: Challenges and Considerations
This study investigates the dynamic relationship between trade openness, external debt, and economic growth in Sub-Saharan Africa, focusing on the period from 1990 to 2023. The research examines how trade openness and external debt impact regional economic performance by employing Panel Autoregressi...
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| Format: | Article |
| Language: | English |
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MDPI AG
2024-10-01
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| Series: | Economies |
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| Online Access: | https://www.mdpi.com/2227-7099/12/11/283 |
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| author | Godswill Osuma Ntokozo Patrick Nzimande |
| author_facet | Godswill Osuma Ntokozo Patrick Nzimande |
| author_sort | Godswill Osuma |
| collection | DOAJ |
| description | This study investigates the dynamic relationship between trade openness, external debt, and economic growth in Sub-Saharan Africa, focusing on the period from 1990 to 2023. The research examines how trade openness and external debt impact regional economic performance by employing Panel Autoregressive distributed lag (ARDL) techniques utilizing the pool mean group and mean group estimator’s approach. The analysis reveals that while trade openness does not stimulate economic growth, external debt similarly has significant challenges, often hindering long-term development prospects within Sub-Saharan African countries. The findings underscore the importance of managing debt sustainably and aligning trade policies with growth-enhancing strategies. Additionally, human capital and institutional quality are essential endogenous growth factors that significantly influence economic growth in Sub-Saharan Africa. The study recommends that while trade openness alone may not directly drive economic growth, its benefits can be amplified by complementary strategies such as investing in human capital, technological adoption, and industrial policy. The study concludes with policy recommendations to enhance economic resilience and foster sustainable growth, such as attracting foreign direct investment, combined with infrastructure development and sound fiscal management. |
| format | Article |
| id | doaj-art-68b68359dcd3403dbadf03213d7e353c |
| institution | OA Journals |
| issn | 2227-7099 |
| language | English |
| publishDate | 2024-10-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Economies |
| spelling | doaj-art-68b68359dcd3403dbadf03213d7e353c2025-08-20T02:07:59ZengMDPI AGEconomies2227-70992024-10-01121128310.3390/economies12110283Exploring the Dynamic Link Between Trade Openness, External Debt, and Economic Growth in Sub-Saharan Africa: Challenges and ConsiderationsGodswill Osuma0Ntokozo Patrick Nzimande1Department of Economics and Econometrics, University of Johannesburg, Johannesburg 2000, South AfricaDepartment of Economics and Econometrics, University of Johannesburg, Johannesburg 2000, South AfricaThis study investigates the dynamic relationship between trade openness, external debt, and economic growth in Sub-Saharan Africa, focusing on the period from 1990 to 2023. The research examines how trade openness and external debt impact regional economic performance by employing Panel Autoregressive distributed lag (ARDL) techniques utilizing the pool mean group and mean group estimator’s approach. The analysis reveals that while trade openness does not stimulate economic growth, external debt similarly has significant challenges, often hindering long-term development prospects within Sub-Saharan African countries. The findings underscore the importance of managing debt sustainably and aligning trade policies with growth-enhancing strategies. Additionally, human capital and institutional quality are essential endogenous growth factors that significantly influence economic growth in Sub-Saharan Africa. The study recommends that while trade openness alone may not directly drive economic growth, its benefits can be amplified by complementary strategies such as investing in human capital, technological adoption, and industrial policy. The study concludes with policy recommendations to enhance economic resilience and foster sustainable growth, such as attracting foreign direct investment, combined with infrastructure development and sound fiscal management.https://www.mdpi.com/2227-7099/12/11/283trade opennessexternal debteconomic growthSub-Saharan Africapanel ARDLhuman capital |
| spellingShingle | Godswill Osuma Ntokozo Patrick Nzimande Exploring the Dynamic Link Between Trade Openness, External Debt, and Economic Growth in Sub-Saharan Africa: Challenges and Considerations Economies trade openness external debt economic growth Sub-Saharan Africa panel ARDL human capital |
| title | Exploring the Dynamic Link Between Trade Openness, External Debt, and Economic Growth in Sub-Saharan Africa: Challenges and Considerations |
| title_full | Exploring the Dynamic Link Between Trade Openness, External Debt, and Economic Growth in Sub-Saharan Africa: Challenges and Considerations |
| title_fullStr | Exploring the Dynamic Link Between Trade Openness, External Debt, and Economic Growth in Sub-Saharan Africa: Challenges and Considerations |
| title_full_unstemmed | Exploring the Dynamic Link Between Trade Openness, External Debt, and Economic Growth in Sub-Saharan Africa: Challenges and Considerations |
| title_short | Exploring the Dynamic Link Between Trade Openness, External Debt, and Economic Growth in Sub-Saharan Africa: Challenges and Considerations |
| title_sort | exploring the dynamic link between trade openness external debt and economic growth in sub saharan africa challenges and considerations |
| topic | trade openness external debt economic growth Sub-Saharan Africa panel ARDL human capital |
| url | https://www.mdpi.com/2227-7099/12/11/283 |
| work_keys_str_mv | AT godswillosuma exploringthedynamiclinkbetweentradeopennessexternaldebtandeconomicgrowthinsubsaharanafricachallengesandconsiderations AT ntokozopatricknzimande exploringthedynamiclinkbetweentradeopennessexternaldebtandeconomicgrowthinsubsaharanafricachallengesandconsiderations |