Effect of External Debt on Sustainable Economic Development in Emerging Economies of Sub-Sahara Africa

The study examined the effect of external debt on sustainable economic development in emerging economies of Sub-Sahara Africa from 2013-2024. External debt was measured by bilateral debt and multilateral debt while sustainable economic development was proxied by human capital index (HDI). The data was sourced from the World Bank Development indicator, United Nations Development Report and the Statistics Bureau of Sub-Sahara African countries. The study adopted the sample of three (3) countries from each Sub-Sahara Africa region; West Africa (Nigeria, Ghana, Senegal) East Africa (Kenya, Rwanda, Ethiopia) Central Africa (Burundi, Gabon, Guinea) South Africa (South Africa, Angola, Lesotho). The study employed regression model to estimate the relationship between external debt and sustainable economic development in emerging economies of Sub-Sahara Africa. The results revealed that multilateral debt had a positive significant effect on HDI in emerging economies of Sub-Sahara Africa. While bilateral debt had no significant effect on HDI in emerging economies of Sub-Sahara Africa. The study recommended that Sub-Saharan African governments should give preference to loans from multilateral institutions such as the World Bank, African Development Bank, and IMF, which typically offer concessional terms and developmental support. These institutions often provide not only funding but also technical assistance and policy guidance that enhance the efficiency of debt utilization. Also, Sub-Saharan African government should give more priority to bilateral loans linked to capital ventures, such as the railway initiative with the China Exim bank. This approach will improve public sector governance and these will ensure that the borrowed funds are channelled into productive and human-capital-enhancing projects.