impact of external debt on economic growth in kenya

Using time series data for the period 1970-1995, the empirical results indicated that external debt accumulation has a negative impact on economic growth and private investment. government debt and economic growth. Were (2001) conducted a time series study on the impact of external debt on economic growth in Kenya indicated that public external debt accumulation has a negative impact on economic growth causing a debt overhang problem. However, the results also indicated that current debt inflows stimulate private investment. However, this still points to weakened domestic demand. Kenya’s debt stock stood at 6.7 trillion shillings ($61.7 billion), or 65.7% of gross domestic product, by the end of June, according to Treasury. In fact, the exclusion of Kenya from the HIPC debt initiative is likely to have been partly based on its poor record of reforms and economic performance rather than its ability to attain sustainable levels of external debt. View/ Open. 1.2: Statement of the Problem The severity of Kenya’s external debt crisis cannot be underestimated and the effects of public debt on economic growth are a major concern for policy makers. Full Text Thesis (720.9Kb) Date 2020. The Impact of External Debt on Economic Growth in Kenya : An Empirical Assessment. to debt write offs and a decline in bilateral and private debt. debt and economic growth. This confirms the existence of a debt overhang problem in Kenya. In 1989, Kenya’s external debt amounting to USD 463 million was written off. The majority of the findings from the literature reviewed on government debt indicated that there was an impact of government debt on economic growth; some showed a positive economic growth while others showed a negative economic growth. Were, Maureen (2001). impact of external debts on economic growth in developing countries in relation to kenya peter kioria gathogo k14s/12760/2011 a research project submitted to the department of economic theory in the school of economics in partial fulfillment of the requirement for the award of degree of economics of kenyatta university. 1 A Critical Review of External Debt and Economic Growth in Kenya Fredrick Mweni United States International University P. O. However, the results also indicated that current debt inflows stimulate private investment. Using time series data for the period 1970- 95, the empirical results indicated that external debt accumulation has a negative impact on economic growth and private investment. (2020) with the ARDL model found negative effect of More than half of that is in foreign currency. Research Objectives and Hypotheses The objective of the study was to assess the effects of external debt accumulation on economic growth in Kenya. A developing country like Kenya compliments its revenue through public borrowing. A Research Project Submitted to the Department of Economic Theory in the School Of Economics in Partial Fulfilment of the Requirement for the Award of a Degree of Master of Economics of Kenyatta University. Kenya - External Debt The economy should have recovered in Q3, albeit frailly, after contracting for the first time in at least a decade in Q2 due to the pandemic. This confirms the existence of a debt overhang problem in Kenya. High levels of public debts require massive debt service which has mixed effects on economic growth. Exports increased in July–August after shrinking in Q2, while the fall in imports softened in the same period. ... Impact of External Debt on Inflation and Exchange Rate in Kenya. Author. which the external debt stock is increasing, but not directly translated to economic growth in Kenya that motivated the researcher to carry out this study. The successive governments have always acquired huge sums of public debt to finance national development plans in Kenya. UNU-WIDER. Likewise, Udoh et.al.

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