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Empirical Analysis on Impact of External Debt on Economic Growth in Nigeria

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  • Taiwo Adewale Muritala

    (Fountain University Osogbo, Osun State, Nigeria)

Abstract

This paper analyzes relationship between external debt and economic growth. Data collections are mainly secondary over the period of 1980 to 2010. The study hypothesized negative relationship between external debt; debt servicing and economic growth. Collected data were regressed using OLS technique and Augmented Dickey Fuller to test for the stationarity of the variables. Findings indicate a negative relationship between external debt and economic growth while that of debt servicing conforms with the apriori expectation of positive relationship. Hence, it is therefore recommended that Nigeria has to narrow down its international trade in order to save its balance of payment (BOP) to meet debt servicing needs of the country. The policy makers should also create credibility including political will in order to spur investor confidence for both local and foreign investments.

Suggested Citation

  • Taiwo Adewale Muritala, 2012. "Empirical Analysis on Impact of External Debt on Economic Growth in Nigeria," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 8(6), pages 123-137, December.
    • Handle: RePEc:dug:actaec:y:2012:i:6:p:123-137
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    File URL: http://journals.univ-danubius.ro/index.php/oeconomica/article/view/1509
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    References listed on IDEAS

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    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
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