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Does external debt impair economic growth in Nigeria?

Author

Listed:
  • Ekor, Maxwell
  • Orekoya, Tayo
  • Musa, Philip
  • Damisah, Osikwemhe

Abstract

The debt and economic growth debate remain topical in Nigeria given the controversies that often trail the government’s plan to always borrow to fund the annual budget deficits. This study provides an empirical contribution to the national discourse by assessing the impact of foreign debt on the Nigerian economy. Applying a dynamic variant of the auto-regressive distributed lag model, the main result from this study is that in the long run, external debt accumulation and the associated service payments have negative effects on the economy. The policy implication is that government should always ensure that external debt accretion is sustainable and used for infrastructure development.

Suggested Citation

  • Ekor, Maxwell & Orekoya, Tayo & Musa, Philip & Damisah, Osikwemhe, 2021. "Does external debt impair economic growth in Nigeria?," MPRA Paper 107844, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:107844
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    References listed on IDEAS

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    1. repec:aer:wpaper:8 is not listed on IDEAS
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    Cited by:

    1. Charles O Manasseh & Felicia C Abada & Ebelechukwu L Okiche & Ogochukwu Okanya & Ifeoma C Nwakoby & Peter Offu & Anuli R Ogbuagu & Chiedozie O Okafor & Paul C Obidike & Nnenna G Nwonye, 2022. "External debt and economic growth in Sub-Saharan Africa: Does governance matter?," PLOS ONE, Public Library of Science, vol. 17(3), pages 1-28, March.

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    Keywords

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    JEL classification:

    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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