The impact of external debt on economic growth in Uganda (1986-2015)

Abstract

The study investigated the impact of external debt on economic growth in Uganda for the period 1986-2015. Time series data on external debt stock and external debt service was used to capture external debt burden. The study set out to test for both a long run and causal relationship between external debt and economic growth in Uganda. An empirical investigation was conducted using time series data on Gross Domestic Product, External Debt Stock, External Debt Payments and Exchange Rate from 1986-2015. The techniques of Estimation employed in the study include Augmented Dickey Fuller (ADF) test, Johansen Co-integration, Vector Auto Regression Approach and Granger Causality Test. The results show No long run relationship and an independent relationship between external debt and economic growth in Uganda.