CBN Journal of Applied Statistics (JAS)
Keywords
Institutional quality, Public debt, Sub-Saharan Africa, fiscal sustainability
Abstract
This paper examines the impact of institutional quality on public debt dynamics in Sub-Saharan Africa (SSA) from 2010 to 2023. Using the system Generalized Method of Moments (GMM)estimator, the study investigates how key governance dimensions (control of corruption, government effectiveness, political stability, regulatory quality, rule of law, and voice and accountability) affect public debt dynamics across 41 SSA countries. GDP growth, debt servicing, population growth, trade openness, inflation, unemployment, and government expenditure, are used to capture broader debt drivers. The results indicate that a one-unit improvement in overall institutional quality reduces debt-to-GDP ratio by approximately 0.92%. Control of corruption, government effectiveness, political stability, regulatory quality, and rule of law exert strong effects, while voice and accountability show limited impact. GDP growth, debt servicing, population growth, inflation, and government expenditure also significantly influence debt dynamics. These findings suggest that strengthening institutional frameworks (particularly through anti-corruption initiatives, enhanced fiscal transparency, and stronger legal-regulatory oversight) can improve fiscal discipline and promote long-term debt sustainability in SSA. Policymakers should therefore prioritize governance reforms alongside prudent macroeconomic management to curb rising debt vulnerabilities across the region.
Issue
2
Volume
16
First Page
35
Last Page
65
Recommended Citation
Sani, Abdullahi
(2025)
"Institutional Quality and Public Debt Dynamics in Sub-Saharan Africa: Implications for Fiscal Sustainability,"
CBN Journal of Applied Statistics (JAS): Vol. 16:
No.
1, Article 2.
DOI: https://doi.org/10.33429/Cjas.16125.2/6
Available at:
https://dc.cbn.gov.ng/jas/vol16/iss1/2