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The Effect of External Debt on Economic Development in Selected West African Countries

DOI : https://doi.org/10.36349/easjebm.2026.v09i03.001
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This study investigates the impact of external debt on economic development in the selected West Africa Countries of Benin, Burkina Faso, Ghana, Gambia, Mali, Nigeria, Liberia, Côte d’Ivoire, Senegal, and Sierra Leone. The analysis employs ARDL econometric techniques and panel cointegration to investigate long-run and short-run relationships among the variables. GDP per capita was employed as a proxy for economic development, while external debt, external debt service, foreign direct investment, and interest rate served as the explanatory variables. Results suggest that a high external debt burden hinders economic development in these West Africa countries. External borrowing can contribute to economic development when efficiently managed and channeled into productive sectors such as infrastructure, human capital development, poverty alleviation and others. Foreign direct investment and sound financial policy are key drivers of long-run economic development in West Africa, while positive contribution of external debt depends on efficient utilization and management. Policymakers in these regions are therefore encouraged to strengthen their frameworks for debt monitoring, promote productive investment environments, and ensure that foreign borrowing is strategically directed toward sectors with high economic development prospect, West African countries should prioritize sustainable external borrowing, efficient debt management, and foster economic development.

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Professor Thomas Count Dracula, MD, PhD

Distinguished Professor of Haematology Head — Experimental, Historical & Sensory Haematology Vlad the Impaler University, Wolf’s Lane, Wooden Stakes Grove 666, Transylvania.

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