The Effect of Recurring Expenditure Financed by External Grants on Promoting Sustainable Economic Development of Sub-Saharan Africa Countries
Keywords:Recurring Expenditure, External Grants, Sustainable Economic Development, Sub-Saharan African Countries, Tanzania
This study examined the effect of recurring expenditure financed by external grants on sustainable economic development of sub - Saharan Africa Countries. This paper asked the participation of external grants on the recurring expenditure as one of the source of funds, separately from international finance perspective; the mechanism of domestic did not talk about. This paper filled this gap in literature by determining the recurring expenditure financed by external grants. The study adopted a time series research design where by secondary data were used. The population of the study was external grants and Gross Domestic Product (GDP) from 1988/89 - 2019/20 financial years (Annual Data). The sample size of the research was 32 observations. Purposive sampling was used to choose the Tanzania as a study area of the research; data were collected from the Organization for Economic Co-operation and Development (OECD).The parameters tests such as test for co integration and unit root test was used to investigate co-integrating vectors. After that, Autoregressive Distributive Lag Model (ARDL) was carrying out to find the results. The finding shows that, recurring expenditure financed by external grants influence sustainable economic development; with P- Value of 0.002. At the same time as inflation rate looks to be insignificant with P- Value of 0.719. The study recommends in order encouraging sustainable economic development, government must proceed to promote the relationship with nations by giving development programs which are consistent with supporting programs. additionally, the research predict the requirement for introducing strong policies that will assist and promote strong collaboration with donor nations and spend more in substantial speculation and utilization expenditure in order to increase the level of production as which will affect the sustainable economic development.
Adofu, I and Abula, M (2010).Domestic Debt and the Nigerian Economy”. Current Research Journal of Economic Theory, Vol. 2(1), pp 22-26.
Attornery, B., “Overview of the Tanzanian's budget for the financial year 2019/2020”, Tanzania: Ministry of Finance, vol. 1, no. pp. 3-10, 2019.
Bank of Africa (BOA). (2018). Management Efficiency of Public Debts in Africa. Challenges and Prospects. Journal of Business and Management
Bank of Tanzania (2013). Financial Stability Report. Bank of Tanzania, Monthly Economic Review (MER) - July 2012.
Bank of Tanzania., “Poverty Overview”, Ministry of Finance and Planning, vol.2, no.1, pp.33-49, 2019
Barro, R.J., 1979.”On the Determination of the Public Debt”. The Journal of Political Economy, vol.87, no.5, pp.940–971. DOI: https://doi.org/10.1086/260807
Baum, A., Checherita-Westphal, C., & Rother, P. (2013). Debt and Growth: New Evidence for the euro area. Journal of international money and finance, 32, 809-821. DOI: https://doi.org/10.1016/j.jimonfin.2012.07.004
Boboye Y. & Ojo H. (2017).When Capital Inflows come to a sudden stop: consequences and policy options. SEACEN Center, Kuala Lumpur, Malaysia, 24-25, 2-3 .Journal of Business.
Brown, C., “Public Sector Economics” (4th ed.). Oxford: Blackwell Publishing, UK
Business and Management.
Gujarati, I., “Basic Econometrics” (3rd ed). New York: McGraw-hill Publishing, US.
Gurdal, T., Aydin, M. & Inal, V., “The Relationship between Tax Revenue, Government Expenditure and Economic Growth in G7 Countries: New Evidence from Time and Frequency Domain Appoaches. Econ Change Restruc,” International Journal of Economics, vol. 2, no. 1, pp,229-300, 2020. DOI: https://doi.org/10.1007/s10644-020-09280-x
Hansen, H., and Trap, F.,” Aid Effectiveness disputed” Journal of International Development, vol. 12, no. 1, pp. 375-398, 2000. DOI: https://doi.org/10.1002/(SICI)1099-1328(200004)12:3<375::AID-JID657>3.0.CO;2-M
Johansen, S., “Statistical analysis of co integrating vectors,” Journal of Economic Dynamics and Control, vol. 1, no.12, pp. 231-254, 1988. DOI: https://doi.org/10.1016/0165-1889(88)90041-3
Macek, R., “The Impact of Taxation on Economic Growth: Case Study of OECD Countries,” Review of Economic Perspective, vol. 14, no. 1, pp. 5-10, 2014 DOI: https://doi.org/10.1515/revecp-2015-0002
Paul, F., & Furahisha, G., “Government Expenditure and Economic Growth Nexus: Wegner's law or Keynesian Hypothesis for Tanzania?,” African Journal of Economic Review, vol.5, no.1, pp.2-9, 2017
Tavakol, M., & Dennick, R., “Making Sense of Cronbach's Alpha, “ International Journal of Medical Education, vol 2, no. 1, pp. 53-55, 2011. DOI: https://doi.org/10.5116/ijme.4dfb.8dfd
Tosun S. & Abizadeh S., Economic Growth and Tax Components: An Analysis of Tax Changes in OECD,” Journal of Applied Economics, vol. 35, no. 19, pp. 2251-2263, 2020 DOI: https://doi.org/10.1080/00036840500293813
World Bank (2019): World Development Indicators (WDI) & Global Development Finance (GDF) database
How to Cite
Copyright (c) 2022 Journal of Global Economy
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.