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The impact of public debt service on economic growth: empirical evidence from Zambia

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  • Talknice Saungweme
  • Nicholas M. Odhiambo

Abstract

This study contributes to the existing public debt service-economic growth nexus by examining the impact of public debt service on economic growth in Zambia using time-series method, covering the period from 1970 to 2017. The study employs the autoregressive distributed lag (ARDL) bounds analysis technique, which permits the simultaneous estimation of the long-run and short-run model parameters. Overall, the empirical results reveal that the impact of government debt service on economic growth, in Zambia, is time-variant. Whereas the neutrality of public debt service on economic growth is confirmed in the long run, in the short run the relationship is negative. To achieve macroeconomic stability and realise sustainable economic growth rates, the paper recommends that the Zambian Government, among other things, undertakes active fiscal consolidation to ensure that debt repayments do not cause excessive budget overruns and are not financed from new debt; and continuously improve public debt management strategies and policies to smoothen the government debt redemption profile.

Suggested Citation

  • Talknice Saungweme & Nicholas M. Odhiambo, 2020. "The impact of public debt service on economic growth: empirical evidence from Zambia," International Journal of Revenue Management, Inderscience Enterprises Ltd, vol. 11(3), pages 172-189.
    • Handle: RePEc:ids:ijrevm:v:11:y:2020:i:3:p:172-189
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    Cited by:

    1. Sheilla Nyasha & Nicholas M. Odhiambo & Mercy T. Musakwa, 2022. "Bank Development and Unemployment in Kenya: An Empirical Investigation," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 20(2 (Summer), pages 85-107.
    2. repec:afa:wpaper:aesriwp23 is not listed on IDEAS
    3. repec:afa:wpaper:aesriwp18 is not listed on IDEAS
    4. Gisele Mah, 2025. "An Asymmetric Analysis of the Impact of Foreign and Domestic Debt on South Africa’s Economic Growth," Economies, MDPI, vol. 13(6), pages 1-16, June.
    5. repec:afa:wpaper:aesri-2022-18 is not listed on IDEAS
    6. Sheilla Nyasha & Nicholas M. Odhiambo & Mercy T. Musakwa, 2022. "Bank Development and Unemployment in Kenya: An Empirical Investigation," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 20(2 (Summer), pages 85-107.
    7. Saungweme Talknice & Odhiambo Nicholas M., 2021. "Public debt and inflation dynamics: Empirical evidence from Zimbabwe," Croatian Review of Economic, Business and Social Statistics, Sciendo, vol. 7(2), pages 14-30, December.
    8. Babalola Olatunji Oladapo & Awe Dayo Amos, 2024. "Investigating the Relationship between Debt Burden Servicing and Infrastructural Development in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(3s), pages 1400-1412, March.

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