• Jean-Marie Mulubwa University of Zambia
  • Dr. Francis Mutohela University of Zambia


Introduction: In COMESA countries, governments have been using public debts (domestic and international debts) to fund their budgets and expenditures. Compared to other parts of Africa, the COMESA region is one of the developed regions in Africa.

Objective of the Study: The objective of the study was to examine the impacts of domestic public debt on the capital market development in Common Market for Eastern and Southern Africa member countries. The study variables used were domestic public debt, inflation rates and interest rate on capital markets development. Keynesian Model, David Ricardo Theory and The Debt Overhang Theory informed the study.

Methodology: This study adopted the descriptive study design. This study used 21 COMESA capital markets as its population. Data collected in this case include COMESA countries Total Debt Value, inflation rate interest rates and Gross Capital Formation.

Findings: Regression of coefficients results showed that domestic public debt and capital markets development are positive and significantly related (r=-4.518, p=0.030). The results further indicated that inflation and capital markets development are negatively and not statistically significant (r=-0.093, p=0.116). It was further established that interest rate and capital markets development were positively and significantly related (r=0.345, p=0.003).

Conclusions and Recommendations: Based on these findings, the study recommends on continued deepening of the capital markets to lengthen further the maturity profile of domestic debt and diversification of the investor base. The study further recommends on continued implementation of policies to support macroeconomic stability and faster economic growth. This includes restructuring public debt towards external borrowing which is comparably cheaper than domestic debt, and rationalization of recurrent expenditures to contain the widening deficit in the primary balance would be necessary in the medium-term to ensure that public debt remains on a sustainable path to allow for capital markets development.

Key Words: Domestic Borrowing, Capital Market Development & COMESA

Author Biographies

Jean-Marie Mulubwa, University of Zambia

University of Zambia

Dr. Francis Mutohela, University of Zambia

University of Zambia


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How to Cite
Mulubwa, J.-M., & Mutohela, D. F. (2020). DOMESTIC BORROWING ON CAPITAL MARKET DEVELOPMENT IN COMESA MEMBER COUNTRIES. African Journal of Emerging Issues, 2(2), 35 - 47. Retrieved from