External debts and economic growth in the democratic republic of Congo from 2000-2010
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Date
2011-02
Authors
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Journal ISSN
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Publisher
Kampala International University, College of Economics and Management
Abstract
This study was guided by three objectives that includes; i) Establish the relationship between external debt and economic growth, ii) Investigate the impact of external debt on economic growth, and iii) Determine the positive and negative effects of external debt on economic growth in Congo DRC. Using a descriptive, comparative correlation and longitudinal study survey the researcher administered a questionnaire to 80 respondents out of a study population of 100 using Solvene’s formula to arrive at the sample size of 80. Using Pearson’s Linear con-elation coefficient showed that; i) Relationship between external debt and economic growth is negatively correlated with external debt (r 0.896, sig 0.630); ii) Impact of external debt on economic growth is negatively correlated (r= 0.922, sig= 0.560); and iii) The positive and negative effects of external debt on economic growth is negatively correlated (r0.925, sig~ 0.600). Basing on these findings, the researcher concluded that; an increase in external debt leads to a reduction in economic growth and that the reverse was true, the researcher implied that better planning and proper management of public funds will enable the country to increase its economic growth and development over a given period of time, and that higher external debt will lead the government to levy heavy taxes on the future generations in order to serve that debt, therefore worsening the country’s economic growth and development. The researcher recommended that; in order to improve the wellbeing the their population, officials of Congo DRC should adopt an export-oriented as the development strategy to enable the country experiencing more rapid export and economic growth than employing import—substitution policies, to avoid debt problems. They must fully be engaged in export-led growth, because this requires import liberalization and increase openness of the economy, which will expose the country to larger and more developed markets.
Description
A Research Report Submitted to the College of Economics and Applied Statistics in Partial Fulfillment of the Requirements for the Award of Bachelor Degree of Economic of Kampala International University
Keywords
External debts, Economic growth, Democratic Republic of Congo from 2000-2010