The Impact and Dynamics of External Debt Servicing on Economic Growth of Ethiopia

The objective of this study was to examine the impact and dynamics of external debt servicing on economic growth of Ethiopia using data for the period from 1982 to 2018.Hence, to achieve its objective the researcher uses both descriptive and econometric method of data analysis. The analysis was based on secondary data retrieve from World Bank (WB) and Central Statistics Authority (CSA). The econometrics model tests such as unit root test, co-integration test and diagnostic test have been done. The study suggests that both long run and short-run indicates that both growth of gross government expenditure and growth of capital formation have significant positive impact on economic growth of Ethiopia in the long run. Based on the finding of this paper it recommends, the authorities were responsible to promote the growth of capital formation to enhance economic growth of Ethiopia by implementing an appropriate policy. DOI: 10.7176/JESD/10-15-05 Publication date: August 31st 201