1.     Since most LDCs limited revenue  from taxation  to meet desired government  expenditure, there  is need to incur debts.

2.     National debts are caused  by the need to  fill the savings investment gap.

3.     The need to pursue rapid economic  growth  by  LDCs  made then the borrow money with heavy interest rates hence the National debt.

4.     Public debts are necessary to fill the foreign exchange gap owing  to the fact that little is raised from export  earnings.

5.     The unfavourable terms of trade against LDCs causes them to incur debts.

6.     The rise in petroleum prices contributed to the  debt crisis since a lot  of petro- dollars were lent the LDCs  at high interest.

7.     The need  by  many LDCs to minimize the adverse effects of taxation forces them to incur debts.

8.     The need for LDCs to use  expatriates in their economies has necessitated them to   borrow  since  they are paid in  dollars.

 

9.     The decline  of payments support from  abroad in terms of grants and the  world recession in 1989 to 1991  did force many LDCs to turn to borrowing.

10.            LDCs have a high debt service ratio e.g. for  Uganda it increased from 60% in 1988  to 106% in 1990 /91. This means our exports alone cannot service  the debts thus need  for further  borrowing.

11.            Most LDCs operate under inflation and with  over- valued exchange rates and  unfair tax system. This  encourages capital flight and reduce the  competitiveness of our exports on world market.

12.            Most aid given to  LDCs   as a lot of conditions or strings attached to it e.g. possible importation   of  inputs from  donor  countries. It is these strings which  make LDCs  experience political  instability.

13.            Most LDCs experiences political instability which forces them to borrow  huge sums of money  for military  hardware.

14.            Corruption and financial  mismanagement  of  government officials  forces the government to borrow.

15.            Most LDCs are faced  with many natural calamities  that forces  them to borrow.

16.            Malice  and sabotage  from  developed countries make LDCs to borrow e.g. Uganda's efforts to avoid debts by undertaking  barter trade were frustrated by a few  industrialized states.

17.            At times incurring debts  more so internal acts as a tool of  monetary policy to ensure economic stability.