Foreign borrowing by itself not a problem when properly utilized for productive investment and does not suffer from macroeconomic instabilities and policies that distort economic incentives. It may not also be a problem when economic growth is high enough to repay the debt as well as to finance additional investment demand. However, reckless borrowing and poor debt management system crowds-out investment and social safety net expenditures, thus adversely affecting poverty reduction efforts. This thesis examines the impact of external indebtedness on poverty in sub-Saharan African (SSA). By employing system generalized method of moments and random/fixed effects estimation, the thesis models the impact of external debt with income and other variables of interest on poverty, measured by poverty headcount ratio, life expectance at birth child, child mortality rate and gross primary school enrolment rate. The empirical results indicate that there exist negative impacts of external debt on GDP growth, and poverty headcount ratio, life expectance at birth and gross primary school enrolment rate. However, under-five child mortality was lower in SSA countries with high external debt. Another important finding is that the life expectance at birth increase as improvement in real GDP per capita and capital formation as well as in the absence of violence/terrorism, but it decreases by inflation rise. Similarly, the rate of child mortality reduces as per capita income of GDP and capital formation increases and in the absence of violence/terrorism, but it rises by inflation increases. The main conclusion is that external debt indicators have a direct impact on poverty. The study also concluded after the effect of income of the level of poverty has been taken into account, external indebtedness has a limited but significant impact on poverty reduction. A negative relationship finding between external debt and poverty indicators does not necessarily indicate that SSA countries should restraint on external borrowing in order to improve growth. Rather, given external debt impact on the poverty reduction, governments in SSA would ensure external borrowings are invested in projects sooner or later generate enough earnings to reimburse the debt back. The nexus between external debt, economic growth and poverty require further research by controlling for institutional quality and management factors.