Public Debt in Light of Some Macroeconomic Variables: An Econometric Study of a Group of Highly Indebted Countries

Abstract

The study aims to measure the impact of some macroeconomic variables on public debt during the period (2000-2025) for a selected group of highly indebted African countries, whether these debts are internal or external, using the Fully Modified Least Squares (FMOLS). The study reached a set of results, the most important of which is the existence of an inverse and significant relationship for the net public budget, the net balance of payments, economic growth, total investment, and foreign direct investment in the total public debt. The results also showed a direct and significant relationship for both the inflation rate and the unemployment rate in the total public debt. It is noted that the unemployment rate variable had the greatest impact on public debt in African economies compared to the rest of the model variables, at a rate of (5.735%). A high unemployment rate reduces the country’s tax revenues and in return increases social expenditures, which leads to a chronic deficit in the country’s general budget and thus requires financing it through public debt. Finally, the research came up with practical conclusions and recommendations that contribute to improving economic policies and reducing dependence on debt.