This study investigates the effects of education spending and institutional conditions on economic growth in 41 countries in Sub Saharan Africa between 2000 and 2024, using the Difference Generalized Method of Moments (Difference GMM) estimation technique. The Difference GMM approach controls for endogeneity, unobservables, and country-specific effects, and yields consistent and robust parameter estimation. The empirical findings clearly show that economic growth is positively and significantly affected by education spending, thus corroborating the human capital hypothesis that education stimulates productivity, innovation, and long-term economic growth. Contrary to this, institutional quality is found to be inversely related with economic growth, implying that poor governance, institutional weaknesses and the lack of effectiveness in policy implementation are detrimental to the development effects of public spending. The results also suggest a positive and significant impact of trade openness on economic growth, indicating the need for regional and international economic integration, and gross fixed capital formation and labour force growth have positive and negative effects respectively, depending on the efficiency of investment and the quality of human capital. It is concluded that education investments must be continued, institutional reforms must be enhanced, and policies must be put in place to support the integration into trade to stimulate inclusive, resilient and sustainable economic growth in Sub-Saharan Africa.

Keywords: Education Expenditure, Institutional Quality, Economic Growth, Difference GMM, Sub-Saharan Africa, Human Capital.