Nigeria public external debt 20082019 data 20202022. According to wikipedia 2018 external debt is the total debt a country owes to foreign creditors. This study set out to analyse the impact of external debt on economic growth of nigeria. Gross domestic product, external debt services, external debt stock, external reserve, and exchange rate. The study examines the effect of external debt on the economic growth of nigeria. The negative impact of external debt on nigeria economic growth hardly come to the mind of the policy makers at the point of contracting the loan. The gauge the relationship between the external debt and growth of the nigeria economy a simple open macro economic debt growth model was applied. Effects of public external debt and private investment on agricultural growth in nigeria. The results show that while external debt has a positive and significant effect on economic growth, foreign aid in conformity with the a priori expectation is positively related to gdp as well but statistically insignificant. The effect of external debt on economic growth in subsaharan africa. In the light of this, this study assesses the impact of public debt on external reserve in nigeria. This study investigates the effect of the external debt burden on economic growth and development of nigeria. Effect of external debt on economic growth and development. The effect of external debt on economic growth in sub.
Highlighting, ajayi and oke 2012 investigated the effect of external debt on economic growth and development of nigeria using ols regression analysis and observed that external debt burden had an adverse. A number of other studies have looked at the impact of external debt on economic growth in developing economies. A number of researchers have examined the effect of external debt on economic growth since the beginning of the new millennium. Pdf effect of external debt on economic growth of nigeria. The three economic fundamentals studied include the economic growth, investment and unemployment and the effect of public debt, across the three decades, has been examined on each of the fundamental. Impact of external debt on economic growth in nigeria. Particularly, the question of interest was whether there is any impact of external debt and debt servicing on economic growth of tanzania. The debtors can be the government, corporations or citizens of another country.
Pdf the impact of external debt on economic growth. The model built for the study proxy gross domestic product as the endogenous variable measuring economic growth as a function of external debt, ratio of external debt to export, inflation, and exchange rate proxy as the exogenous variables. In another single country study, adegbite 2008 investigate the impact that nigerias et al. Saharan african country also relies on external debt to finance its saving investment gap, budget deficit and balance of payment deficit. The effect of external debt on a nations economy has been a subject of controversy among academics. Ajayi and oke 2012 investigation of the effect of external debt burden on economic growth and development of nigeria using regression analysis of ols showed that external debt burden had an adverse effect on the nation income and per capital income of the nation. The debt model has been used to identify the nature and extent relationship of total public debt with the variables total consumption, manufacturing sector growth, tax revenue, subsidy, net export and total government stock. The analyses of the data collected with descriptive statistics shows that, availability of access to external finance strongly. Determine the effect of external debt servicing on gross domestic product in nigeria. The effect of external debt on economic growth of nigeria, largest undergraduate projects repository, research works and materials.
Pdf the impact of debt management on the economic growth. Abula and ben 2016 in their study, concluded that external debt of nigeria has not been instrumental in enhancing the development of nigerias economy and an increase in the level of debt servicing to the various creditors of the economy would reduce the level of economic growth and development in nigeria. Nigeria in her desperate quest for money to finance economic growth accepted foreign loans under stringent conditions. This study examined the effect of public debt on economic growth of nigeria. Ajayi and oke 2012 investigated the effect of the external debt burden on economic growth and development of nigeria. The scope of this study shall cover the external debt trend of nigeria over the years to date. This paper examines the effect of public debt in pakistan since the 1980s to 2014. The nexus between external debt and economic growth in nigeria. The study set out to test for both a long run and causal relationship between external debt and economic growth in nigeria.
This article aims at determining the impact of various components of fiscal policy on the nigerian economy. Some studies on subsaharan africa concluded that external debt is deleterious to growth, but these studies are very scanty. Findings among other things, the negative impact of debt and its servicing requirements on growth is confirmed in nigeria. Mbah 2016 investigated the impact of external debt on economic growth of nigeria using the ardl bound testing approach to cointegration. Download undergraduate projects topics and materials accounting, economics, education. The main objective of this paper is to examine the effect of external debt on economic growth in tanzania during the period of 199020, using time series econometric technique where by data were collected. The impact of external debt on economic growth is a debatable issue between scholars since the onset of the debt crisis in 1980s. External debt and growth dynamics in nigeria adamu. In addition, external debt contributes positively to growth up to a point after which its contributions become negative reflecting the presence of nonlinearity in effects. We investigate the influence of external debt on the fdigrowth relationship. Effect of external borrowing and foreign aid on economic. Determinants and sustainability of external debt in a. The impact of nigerias external debt on economic development.
An empirical investigation was conducted using time series data on real gross domestic product, external debt stock, external debt payments and exchange rate from 19802012. The nexus between external debt and economic growth in. External debts are funds sourced from outside the nations boarder usually in foreign currency and are interest bearing to finance specific projects. The remaining part of the study is organized as follows. Effect of external debt on economic growth of nigeria. The impact of debt management on the economic growth of nigeria. Data for the study are collected from secondary sources.
Effects of public external debt and private investment on. This phenomenon is usually referred to as debt overhang problem. Doc the effect of public debt on the growth of nigerias. This paper will examine specifically, the extent to which variations in nigeria debt structure contributed to the nations economic growth. This page provides nigeria external debt actual values, historical data, forecast, chart, statistics, economic. Loan or borrowing to fund gaps in government revenue has become norm in subsahara africa especially in nigeria. Debt service payment, external reserve resource and interest rate has no significant effect on nigeria economic growth and development the rejection of the null hypothesis means the acceptance of the alternative hypothesis. Effect of external debt on economic growth of nigeria l. The resultant effect of the debt quagmire in nigeria could create some unfavourable circumstances such as crowding out of private investment, poor gdp growth e. Some were of the view that external debt accelerates economic growth.
An empirical analysis of east african countries halima ibrahim x506723420 a research paper submitted in partial fulfilment of the requirements for the award of a degree of master of arts economics, university of nairobi. This has informed the need to embark on the present study with a view to investigating the impact of. They adopted the ordinary least square ols regression technique on secondary data and on variable like national income, debt service payment, external reserves, interest rate among others. The effect of foreign debt on the economic growth of nigeria. Analysis of the impact of external debt on economic growth in an. The findings from the error correction method show that external debt has contributed positively to the nigerian economy. Dsp, extr, intr 1 the model employed in the study includes the following. Threshold estimation is conducted on data for 39 developing countries over 19842010. Our data allow us to look at the impact of household, nonfinancial corporate and government debt separately. Pdf this research work was aimed at ascertaining the impact of external debt on economic growth in nigeria. This study uses a sample of 39 ssa countries for 24 years 199020 to examine the effect of external debt on economic growth in ssa. The external debts of nigeria and south africa are analyzed in a new context utilizing traditional, but innovative, models and econometric techniques. Nigeria is confronted with the issue of limited capital and has to resort to foreign debt in order to augment domestic savings, balance of payment deficits, and shortfall in revenue which induce continuous raise in the debt stock at an alarming rate. The study postulates that external debt does not contribute to the economic growth of nigeria.
Ascertain the impact of external debt on gross domestic product gdp 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. They use a solowtype neoclassical growth model to regress the ratio of external debt to gross domestic. The nigerian economy is one of the largest in africa. Research hypotheses the study was guided by the following null hypotheses. We simply used descriptive statistics to show contribution of government fiscal policy to economic growth, and to ascertain and explain growth rates, and an ordinary least square ols in a multiple form to ascertain the relationship between economic growth and government expenditure.
We begin by constructing an external debt sustainability index using principal component analysis to capture the overall effects of external debt indicators on economic growth. However, the empirical investigation of the effect of external debt on the economic growth of nigeria shall be restricted to 1981 and 2010. Effect of external debt on nigerian economy munich personal. A series of world oil price increases from 1973 produced rapid economic growth in transportation, construction. The study sought further evidences on the effect of external debt on economic growth in nigeria. The scope of the study covers the period from 1985 to 2015. A theoretical model is developed to account for the influence of debt on the fdigrowth nexus. Effect of external debt on economic growth of nigeria 1. Impact of domestic and external debts on economic growth. This paper examines the effect of external debt on economic growth in subsaharan africa ssa in view of an upsurge in the level of external debt in many countries on the continent.
This paper investigates the impact of the huge external debt, with its servicing requirements, on economic growth of the nigerian and south african economies. Analysis of the impact of external debt on economic growth. The role of external debt in the foreign direct investment. Specifically, the study determined the impact of domestic debt on the economic growth of nigeria. This paper aims to investigate the impact of huge external debt with its servicing requirements on economic growth of the nigerian economy so as to make meaningful inference on the impact of the debt relief which was granted to the country in 2006. Apparently, empirical attempts at investigating the tripartite relationship. The debt includes money owed to private commercial banks, other governments, or international financial institutions such as the international monetary fund imf and world bank. The model built for the study proxy gross domestic. However, inflation and external debt have negative effect on growth but this negative effect is not significant for inflation. Corresponding author banking and finance department, faculty of management sciences, ekiti state university, ado ekiti. The general overview of the debt cancellation shall be taken with certain issues raised and discussed. Effect of public debt on economic growth of nigeria. In the debt model impact of domestic debt and external debt on the gdp growth rate of bangladesh has been captured. This thesis examines whether external debt affects the economic growth of selected heavily indebted poor african countries through the debt overhang and debt crowding out effect.
Effect of external debt on economic growth and development of nigeria. Ayadi and ayadi 2008 examined the impact of the huge external debt, with its servicing requirements on economic growth of the nigerian and south african economies. As a result, this study seeks to assess the effect of external debt on economic growth in nigeria as well as provide further evidences on the impact of debt on the process of growth in nigeria. The effect of external debt on investment and economic growth. The effects of external debt management on sustainable. External debt also improves total factor productivity through an increase in output which in turn enhances gross domestic product gdp growth of a nation. Establish the impact of exchange rate on gross domestic product in nigeria. This implies that foreign aid is beneficial to nigeria but has not been much felt.
Information was generated extensively from literature, the nigeria central bank and national bureau of statistic reports. Since the late 1960s it has been based primarily on the petroleum industry. Pdf the impact of nigerias external debt on economic. This paper investigates the dynamic effects of external debt on economic growth in nigeria from 1970 through 20. Negative impact of external debt on nigeria economic growth. The functional relationship between the variable and proxies can be expressed as ni. The management of nigerias debt profile has been a major problem for a long time now and if not well handled might get out of hand. Pdf the impact of public debt on economic development of. Despite the introduction of diverse debt management strategies and techniques, the rising public debt trend has.
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