PUBLIC DEBT AND ECONOMIC GROWTH IN EAST AFRICAN COMMUNITY

Abstract

The study empirically investigated the relationship between public debt and economic growth in East African Community (EAC) from 2002 to 2020. The study deployed longitudinal research design and the analysis was carried out through autoregressive distribution lag model. The population of the study consisted of six countries in EAC, Kenya, Tanzania, Uganda, Burundi, Rwanda and South Sudan. It was observed that public debt positively and significantly influences economic growth in EAC. The findings imply that the governments should develop policies that would guide investment criteria in the member states. Proper implementation of policies would channel public debt in the productive sector of the economy. Therefore, debt is good for the economy but only when invested in productive sector of the economy. This paper provides up to date findings to support existing literature on public debt and economic growth using variables and empirical model which prior studies could not sufficiently cover in developing countries, and state that public debt positively influences economic growth in East African Community.

Key words: Public Debt, Economic Growth, East African Community