EFFECT OF DEBT SERVICE AND REMITTANCE ON EDUCATION IN SUB SAHARAN AFRICA

Abstract

The study generally seeks to examine the effect of Debt Service and Remittance on Education in Sub-Saharan Africa current education expenditure. The studies used multicollinearity and multiply regression. The population of the study consists of ten year panel data from 2012 to 2021. The study sampled forty three countries from Sub-Sahara Africa. Data were collected from secondary source, particularly from World Bank database, United Nations Development Programme database, UNESCO Institute for Statistics Database and Human Development Reports. The data was collated using STATA version 14. The study revealed that external debt stock, represented by "Ext Debt," does not have a statistically significant effect on education expenditure in Sub-Saharan African countries. It was also identified that total debt stock, represented by "Total Debt," has a negative effect on education expenditure in Sub-Saharan African countries, and further showed that remittances, represented by "Ln Pers Remit" (natural logarithm of personal remittances), have a statistically significant positive effect on education expenditure in Sub-Saharan African countries. Based on the findings of the study, it is recommended given the positive impact of personal remittances on education expenditure, governments and policymakers in Sub-Saharan Africa should explore ways to harness and optimize remittance inflows for educational purposes. Initiatives such as remittance-backed education funds or partnerships with diaspora communities could be considered. It is prudent for governments to carefully manage their debt levels, considering the potential negative impact on education infrastructure. Governments should establish robust data collection and monitoring systems to track the utilization of funds allocated for education. This will ensure that funds, including remittances and debt-financed investments, are effectively channeled into improving educational access, quality, and infrastructure.