Government size, public debt and inclusive growth in Africa

Abstract

A fixed effect regression model is used to examine the relationship between government size, public debt and inclusive growth for a panel of 54 African countries over the period 2000 to 2016. The findings from the study suggest that, the size of government has a positive effect on inclusive growth, and the extent of public indebtedness has a negative effect on inclusive growth, as well. It is further observed that improvements in inclusive growth work to promote levels of inequality-reducing growth. These findings indicate the need for policymakers in Africa to take the necessary steps to make growth more inclusive by ensuring optimal fund allocations, and optimal debt levels of public debt for each government is not breached.