The Effect of Foreign Debt on Economic Growth in Sub-Saharan African Sub-Regions

The main objective of this paper is to verify the effect of foreign debt on economic growth in sub-Saharan African sub-regions from 1980 to 2017. The paper applies the Generalized Method of Moments (GMM) with robust standard deviations using the Lewbel’s estimator (2012). Results indicate that foreign debt significantly enhances growth in four zones (SADC, EAC, CEMAC and ECOWAS) with different bearable thresholds. This seems to suggest that creditors may be aware that countries do not exceed their bearable threshold at least at regional level.