The Impact of Government Debt on Economic Growth in Zimbabwe (1985-2012) · Electronic Theses and Dissertations

Author: Nyakudya, Tinashe. M
Title: The Impact of Government Debt on Economic Growth in Zimbabwe (1985-2012)
Abstract: External debt is considered as a significant source of income for developing countries. However, a group of sub-Saharan countries classified as HIPCs including Zimbabwe, have continued to experience difficulties in managing and serving their huge stock of external debt. Zimbabwe has experienced declining growth rates for the number of years and at the same period government debt was accumulating. Therefore, the study sought to determine the impact of government debt on economic growth in Zimbabwe using time series data from 1985-2012. The research paper also sought to determine the impact of foreign direct investment, gross capital formation, labour, and exports on economic growth. The study employed Ordinary Least Squares regression model to show the impact of external debt on economic growth. Zimbabwe is one of the countries severely affected by debt overhang. The research used data from World Bank and ZIMSTAT. The study found out that government debt has negative effects on economic growth which is in line with most Less Developed Countries (LDCs). From these results the researchers should be worried much with the increase in government debt due to the relationship it holds with economic growth. The results indicate that external debt has a deleterious impact on economic growth. Continuous borrowing from foreign sources would negatively affect Zimbabwe`s economic growth.
Date: 2022
Publisher: BUSE
Keywords: foreign
Supervisor: Nil

Item sets: Department of Economics

Media: Tinashe_Nyakudya.pdf