Re-visiting the external debt-economic growth question in Zimbabwe

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dc.contributor.authorMazorodze, Brian
dc.coverage.conferenceissn
dc.date.accessioned2025-11-25T09:57:22Z
dc.date.available2025-11-25T09:57:22Z
dc.date.issued2020
dc.departmentNameEconomics
dc.description.abstractThis paper quantifies the threshold effect of external debt on economic growth in Zimbabwe between 1980 and 2016. Results from the Fully Modified Ordinary Least Squares (FMOLS) technique confirm that external debt (up to 57% of GDP) raises economic growth. Beyond the 57% of GDP threshold, external debt lowers growth. A separate analysis of variance shows that the mean GDP per capita is lower by 11% when external debt exceeds 57%. From the sample average, the 57% of GDP threshold suggests that debt stock above 4.7 billion USD can be detrimental to the country’s long-run growth prospects. Currently, Zimbabwe’s external debt is standing at over 11 billion USD which is way above the estimated threshold level. Therefore, the policy implication arising from this paper is that the country’s Finance Minister needs to pursue debt-reduction strategies given that the country’s stock of external debt is already sitting in the growth-reducing territory.
dc.facultyFaculty of Commerce, Administration and Law
dc.format.preprintNo
dc.identifier.citationMazorodze, B.T., 2020. Re-visiting the external debt-economic growth question in Zimbabwe. Journal of Economics and Behavioral Studies, 12(2), pp.1-8.
dc.identifier.issn2220-6140
dc.identifier.otherhttps://doi.org/10.22610/jebs.v12i2(J).2939
dc.identifier.urihttp://hdl.handle.net/10530/58394
dc.inproceedingsissn
dc.issuenumber12 / 2
dc.keynoteissn
dc.pages1 - 8
dc.peerreviewedYes
dc.publisherAMH International
dc.subjectFiscal policy
dc.subjectExternal debt
dc.subjectThreshold
dc.subjectGDP per capita
dc.subjectZimbabwe
dc.titleRe-visiting the external debt-economic growth question in Zimbabwe
dc.title.journalJournal of Economics and Behavioral Studies
dc.typeJournal Article
dspace.entity.typePublication
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