Public Debt, Governance and Economic Performance in the Selected Sub-Saharan African Countries

Abstract

The persistent poor economic performance in Sub-Saharan Africa (SSA) is often associated with rising public debt levels and persistent governance challenges. This study examines the effect of public debt and governance indicators specifically control of corruption and political stability on economic performance in selected SSA countries, namely Nigeria, South Africa, Kenya, and Angola. The study utilized secondary data obtained from the World Development Indicators and World Governance Indicators of the World Bank covering the period 1996–2023. A longitudinal research design was adopted, and the Panel Autoregressive Distributed Lag (ARDL) model was employed to analyze both the short-run and long-run relationships among the variables. The empirical results show that governance indicators, particularly political stability and control of corruption, have a significant influence on long-run economic performance (p < 0.05). The findings further reveal that external debt exerts a positive effect on economic performance in the long run, suggesting that properly managed borrowing can support productive investment and economic growth. In contrast, debt servicing obligations have a significant negative effect, indicating that increasing debt burdens may constrain fiscal capacity and reduce resources available for development. The study therefore recommends the adoption of debt service reduction strategies, including concessionary borrowing with favorable repayment conditions. In addition, strengthening governance institutions, particularly through improved control of corruption and enhanced political stability is essential to ensure that public debt contributes effectively to sustainable economic growth in Sub-Saharan Africa.