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<p>Public debt has become a central policy concern in Sub-Saharan Africa (SSA), where many countries have experienced rapid debt accumulation alongside modest economic growth. While public borrowing can support growth through financing productive investment, excessive debt may undermine macroeconomic stability and constrain long-term growth. This study investigates whether public debt constrains economic growth in Sub-Saharan Africa (SSA), emphasizing non-linear effects and the moderating role of macroeconomic stability indicators. Using panel data for 35 SSA countries from 2000–2023, the analysis applies Fixed Effects, System Generalized Method of Moments (System GMM), and Panel Threshold Regression techniques to address endogeneity, growth persistence, and potential structural breaks in the debt–growth relationship. The dynamic results show that public debt has a statistically significant negative impact on economic growth once endogeneity is controlled for, while inflation exacerbates this adverse effect and stronger fiscal balances mitigate it, highlighting the central role of macroeconomic stability. The threshold analysis identifies a critical debt turning point at approximately 59.8% of GDP, below which public debt modestly enhances growth but beyond which it becomes significantly growth-constraining, with the negative effect more than twice the magnitude of the positive effect in the low-debt regime. Gross capital formation remains the strongest driver of growth across specifications. These findings have important implications for sustainable development in Sub-Saharan Africa. By identifying a critical debt threshold and the role of macroeconomic stability, the study contributes to policy efforts aimed at achieving Sustainable Development Goals (SDGs), particularly SDG 8 on sustained economic growth, SDG 1 on poverty reduction, and SDG 17 on debt sustainability. The results highlight that maintaining sustainable debt levels and macroeconomic stability is essential for fostering inclusive and resilient economic development in the region.</p>

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Nonlinear effects of public debt on economic growth through macroeconomic stability indicators in Sub Saharan Africa

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  • 出版模式：

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  • 发表日期：

    2026年6月25日

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  • Mohamed K. Mwanga,
  • Fredrick Mwangela

摘要

Public debt has become a central policy concern in Sub-Saharan Africa (SSA), where many countries have experienced rapid debt accumulation alongside modest economic growth. While public borrowing can support growth through financing productive investment, excessive debt may undermine macroeconomic stability and constrain long-term growth. This study investigates whether public debt constrains economic growth in Sub-Saharan Africa (SSA), emphasizing non-linear effects and the moderating role of macroeconomic stability indicators. Using panel data for 35 SSA countries from 2000–2023, the analysis applies Fixed Effects, System Generalized Method of Moments (System GMM), and Panel Threshold Regression techniques to address endogeneity, growth persistence, and potential structural breaks in the debt–growth relationship. The dynamic results show that public debt has a statistically significant negative impact on economic growth once endogeneity is controlled for, while inflation exacerbates this adverse effect and stronger fiscal balances mitigate it, highlighting the central role of macroeconomic stability. The threshold analysis identifies a critical debt turning point at approximately 59.8% of GDP, below which public debt modestly enhances growth but beyond which it becomes significantly growth-constraining, with the negative effect more than twice the magnitude of the positive effect in the low-debt regime. Gross capital formation remains the strongest driver of growth across specifications. These findings have important implications for sustainable development in Sub-Saharan Africa. By identifying a critical debt threshold and the role of macroeconomic stability, the study contributes to policy efforts aimed at achieving Sustainable Development Goals (SDGs), particularly SDG 8 on sustained economic growth, SDG 1 on poverty reduction, and SDG 17 on debt sustainability. The results highlight that maintaining sustainable debt levels and macroeconomic stability is essential for fostering inclusive and resilient economic development in the region.