THE IMPACT OF EXTERNAL DEBT ON ECONOMIC GROWTH IN GHANA
Adubofour Isaac, Mangudhla Tinashe, Dadzie Benjamin Mensah
Student, Jiangsu University
The debt position of a country is crucial to the growth of its economy. We argue with empirical basis in this study that, external debt has impact on the growth of Ghanaâ€™s economy. A time- series data, spanning from 1991-2019 was analyzed. The findings of the study suggested a statistically significant and inverse relationship between external debt and economic growth. It is also argued in the study that, Ghanaâ€™s inflation regime has a significant impact on the growth of her economy. The study further verified the relationship between foreign direct investment and economic growth in Ghana. Results of the study revealed a significant and direct relationship between foreign direct investment in Ghana and the growth of the countryâ€™s economy. A test on granger causality found no causal linkage between external debt and economic growth in Ghana. The contribution of the study was finally discussed and limitations stated to serve as a guide for future study.
Keywords: External debt, economic growth, inflation, foreign direct investment, time series data.
Journal Name :
EPRA International Journal of Economics, Business and Management Studies (EBMS)
Published on : 2021-09-06