Open AccessIMPACT OF EXTERNAL DEBT ON ECONOMIC GROWTH IN NIGERIA
Author(s) -
Timothy Ogbemudiare Ideh,
Maria Chinecherem Uzonwanne
Publication year - 2021
Publication title -
european journal of economic and financial research
Language(s) - English
Resource type - Journals
ISSN - 2501-9430
DOI - 10.46827/ejefr.v5i2.1156
Subject(s) - external debt , economics , debt , revenue , internal debt , monetary economics , development economics , macroeconomics , finance
Following the rising spate of the debt profile of Nigeria and the fluctuating trend in her macroeconomic indicators, this study critically examined the impact of external debt on economic growth in Nigeria in the period, 1985 to 2019 by examining the causality between external debt stock and economic growth in Nigeria and identify the impact of external debt servicing on economic growth in Nigeria. The study employed the Harrod-Domar theory of economic growth and the Two-Gap model as theoretical framework to explain the impact of external debt on economic growth in Nigeria. The study made use of secondary data sourced from World Development Indicator 2019. Ordinary least square (OLS) technique was adopted for the regression analysis. The data were analyzed with the aid of e-view software (9th edition). The result showed that external debt has negative and insignificant impact on economic growth in Nigeria. Therefore, the study recommended the use of tax revenue to finance public deficit, encouragement of foreign direct investment and domestic investment through improvement in infrastructural facilities and an enabling environment devoid of political and economic instability.
JEL: E32, E41, F33, F34, F43
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