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Effect of external debt on Nigerian Economy: Further evidences

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  • Festus, Gift Emmanuel
  • Saibu, Muibi Olufemi

Abstract

The study sought further evidences on the effect of external debt on economic growth in Nigeria. Time series data on external debt stock, real gross domestic product, trade openness, and gross fixed capital formation as a percentage of GDP as well as data on inflation and exchange rates were obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin and World bank indicators. The study set out to test for both the long run and short run relationship as well as presenting further evidences on the relationship between external debt and economic growth. The Autoregressive Distributed Lag (ARDL) Model was employed as a technique of estimation in the study and the results led a finding that the external debt contribute negatively to growth in Nigeria based on data from 1981 through 2016 which was in line with Ayadi and Ayadi(2008). The study recommended amongst others, the need for accountability in governance, good macroeconomic policy environment, proper acquisition and use of debt solely for productive reasons and the enhanced exportation of domestic products.

Suggested Citation

  • Festus, Gift Emmanuel & Saibu, Muibi Olufemi, 2019. "Effect of external debt on Nigerian Economy: Further evidences," MPRA Paper 92704, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:92704
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    File URL: https://mpra.ub.uni-muenchen.de/92704/1/MPRA_paper_92704.pdf
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    References listed on IDEAS

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    1. Panagiotis Pegkas, 2018. "The Effect of Government Debt and Other Determinants on Economic Growth: The Greek Experience," Economies, MDPI, vol. 6(1), pages 1-19, February.
    2. Lucy Anning & Collins Frimpong Ofori & Ernest Kwame Affum, 2016. "The Impact of Government Debt on the Economic Growth of Ghana: A Time Series Analysis from 1990-2015," International Journal of Innovation and Economic Development, Inovatus Services Ltd., vol. 2(5), pages 31-39, December.
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    Cited by:

    1. Dr.Terese Uji, 2023. "Analysing the Incidence of External Debt Stocks and Exchange Rate Fluctuations on Economic Growth in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(7), pages 628-638, July.
    2. Manamba EPAPHRA & William MESIET, 2021. "The external debt burden and economic growth in Africa: a panel data analysis," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(627), S), pages 175-206, Summer.

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    More about this item

    Keywords

    External debt; growth; further evidences.;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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