Assessing the long-term economic stability of public debt in Tanzania

Enock Mwakalila and Coretha Komba

African Journal of Economic and Management Studies, 2025, vol. 17, issue 5, 723-735

Abstract: PurposeThis study empirically analyzes the impact of public debt on long-run economic growth and stability in Tanzania.Design/methodology/approachAutoregressive Distributed Lag (ARDL) Model estimation with a bound cointegration test establishes the short- and long-term relationship.FindingsThe results show that public debt decreases economic growth and stability in the long run, underscoring the importance of sound debt management practices. These include ensuring a mix of external and domestic borrowings, more robust institutional frameworks and greater economic diversification, which are vital for the country’s long-term economic stability.Originality/valueThe research findings help policymakers formulate sensible fiscal policies and debt management strategies for a stable macroeconomic environment. The study addresses a significant gap in the existing literature due to focusing on a significant Tanzanian context and thus contributing to regional stability, as well as the global Sustainable Development Goal (SDG 2) that strives towards “zero hunger.”

Keywords: Economic growth; Economic stability; Public debt; Time series analysis; Tanzania (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ajemsp:ajems-10-2024-0612

DOI: 10.1108/AJEMS-10-2024-0612

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