Title: Effect Of Domestic Debt On Sustainable Economic Development In Emerging Economies Of Sub-Sahara Africa
Authors: Prof Wilson Herbert & Ibrahim Babangida Umar
Volume: 10
Issue: 4
Pages: 148-158
Publication Date: 2026/04/28
Abstract:
The study examined the effect of domestic debt on sustainable economic development in emerging economies of Sub-Sahara Africa from 2013-2024. Domestic debt was measured by bank debt and non-bank debt while sustainable economic development was proxied by human capital index (HDI). The data was sourced from the World Bank Development indicator, United Nations Development Report and the Statistics Bureau of Sub-Sahara African countries. The study adopted the sample of three (3) countries from each Sub-Sahara Africa region; West Africa (Nigeria, Ghana, Senegal) East Africa (Kenya, Rwanda, Ethiopia) Central Africa (Burundi, Gabon, Guinea) South Africa (South Africa, Angola, Lesotho). The study employed random effect regression model to estimate the relationship between domestic debt and sustainable economic development in emerging economies of Sub-Sahara Africa. The results revealed that both bank debts and non-bank debt had a positive significant effect on HDI in emerging economies of Sub-Sahara Africa. The study recommended that Sub-Saharan governments should enhance the capacity of the banking sector to serve as an effective intermediary for development financing. These policies will promote banks' participation in funding priority sectors such as education, healthcare, and infrastructure through well-structured government securities and development-linked credit instruments. Also, Sub-Saharan African government should prioritize the issuance of longer-maturity domestic bonds to finance projects in human capital development and social infrastructure like the Sukuk loans which are tied to capital projects like roads, rails, and many other infrastructural developments, which will yield sustained improvements in HDI over time.