Economic development, aid and debt crisis in sub-Saharan Africa

This thesis examines the inverse relationship between foreign capital inflow and domestic savings. The results of the tests lead to a variety of outcomes: (1) There is a positive relationship between the domestic savings ratio and the foreign savings ratio in sub-Saharan African countries. (2) The conclusion from the statistical use of the Chow Test shows that the derived results are reliable results, with the exception of one country, Tanzania. (3) There is no evidence from the cross-sectional study of sub-Saharan Africa to support the negative effect. (4) The performance of the lagged form indicated that the lagged function is the correct function for the negative effect of foreign savings on the domestic savings ratio; In general, the evidence that the foreign savings ratio caused the domestic savings ratio to decline was found in the long-run, rather than the short-run. (Abstract shortened with permission of author.)