- Title
- The impact of international debt on taxation & economic growth on five SSA countries
- Creator
- Mpompi, Liyema
- Subject
- Taxation
- Subject
- Economic development -- South Africa
- Subject
- International finance
- Date Issued
- 2024-12
- Date
- 2024-12
- Type
- Master's theses
- Type
- text
- Identifier
- http://hdl.handle.net/10948/70044
- Identifier
- vital:78282
- Description
- This study investigated the effect of international debt on taxation and economic growth in five selected sub-Saharan African countries (SSA): Nigeria, South Africa, Ethiopia, Kenya, and Ghana. The study employed panel data, and the data sample spans from 1990 to 2021. A unit root testing procedure utilising the Levin-Lin-Chu test, the Pearson and Shin test, the Augmented Dickey-Fuller (ADF) test, the Breitung test, and the Hadri test was applied to test for stationarity among variables. Cointegration analysis was used to test the long-run association among variables, including Mean Group (MG), Pooled Mean Group (PMG), and Dynamic Fixed Effects (DFE) models for ascertaining if long-run coefficients vary across individual units, allowing for individual-specific short-run dynamics and capturing time-varying factors that affect the relationship between the dependent and independent variables in the study. The empirical results for the long-run relationship showed a strong correlation between GDP and external debt in all the countries. A unit increase in external debt reduces GDP growth by 0.628394%. This indicates that high levels of external debt have a significant negative impact on economic growth over time. The short-term relationship showed country-specific effects of debt on economic development, where an increase in the eternal debt-to-GDP ratio by one unit decreases GDP by 0.009029%. SSA countries differ significantly in how foreign debt and economic development are related. Countries like Nigeria, Ethiopia, Kenya, and Ghana, which have large amounts of foreign debt, have experienced economic instability and uncertainty. Due to its heavy debt load, Kenya has faced periods of negative economic growth. However, South Africa has consistently seen GDP growth while maintaining constant levels of external debt. There is also a great deal of variation in how taxes affect economic development across the five selected SSA countries. Countries such as South Africa and Ghana, which have more consistent and large tax revenues, have made significant expenditures in economic development, boosting economic growth. Conversely, economic growth has been unequal in nations such as Nigeria, where tax revenue is subject to fluctuations. Furthermore, countries with low tax revenues, such as Ethiopia and Kenya, have seen their economic growth impeded due to their limited capacity to fund necessary development initiatives.
- Description
- Thesis (MCom) -- Faculty of Business and Economic Sciences, School of Economics, Development and Tourism, 2024
- Format
- computer
- Format
- online resource
- Format
- application/pdf
- Format
- 1 online resource (93 pages)
- Format
- Publisher
- Nelson Mandela University
- Publisher
- Faculty of Business and Economic Sciences
- Language
- English
- Rights
- Nelson Mandela University
- Rights
- All Rights Reserved
- Rights
- Open Access
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- Visitors: 9
- Downloads: 2
Collections
NMU School for Economics, Development and Tourism
| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | SOURCE1 | MPOMPI, L.pdf | 2 MB | Adobe Acrobat PDF | View Details Download |