The Impacts of External Debt on Economic Growth in Nigeria

Filed in Economics Project Topic by on October 20, 2020

The Impacts of External Debt on Economic Growth in Nigeria

INTRODUCTION

Sustainable economic growth is a major concern for any sovereign nation most especially the Less Developed Countries (LDCs) which are characterized by low capital formation due to low levels of domestic savings and investment (Adepoju, Salau and Obayelu, 2007).

It is expected that these LDC’s when facing a scarcity of capital would resort to borrowing from external sources so as to supplement domestic saving (Aluko and Arowolo, 2010; Safdari and Mehrizi, 2011; Sulaiman and Azeez, 2011).

Economic theory suggests that reasonable levels of borrowing by a developing country are likely to enhance its economic growth (Pattillo, Ricci, and Poirson 2002).

Research Questions

Having considered the problems inherent in borrowing externally specifically the impact growth and investment, the following research questions were asked;

  1. What is the impact of external debt on economic growth in Nigeria?
  2. Does external debt servicing significantly affect economic growth in Nigeria?

Objectives of the Study

The central objective of this study is to empirically investigate the impacts of external debt on economic growth in Nigeria over the period of 1980 to 2015. In line with this, the specific objectives of this study are on;

  1. To determine if external debt significantly affect economic growth in Nigeria.
  2. To ascertain if external debt servicing significantly affect economic growth in Nigeria?

REFERENCES

Abbas, A. S., & Christensen, J. (2010). The role of domestic debt markets in economic.

Adam, C. S., & Bevan, D. L. (2005). Fiscal deficits and growth in developing Countries. Journal of Public Economics, 4, 571-597.

Alberto, A., & Tabellini, G. (1989). External debt, capital flight and political risk. Journal of InternationalEcnomics, 27(3-4), 199-220.

Anderson, P.A., Arne, B., & Persson, H. (2000). “Foreign aid, debt and growth in Zambia”. Sweden: Motala Grafiska.

Arellano Manuel, & Bond, S. (1991). Some tests of specification for panel data: MonteCarlo evidence and an application to employment equations. Review of Economic Studies, 58(2), pp. 277-297.

Arnone, Marco, and Andrea F. Presbitero, (2007), “External debt sustainability and domestic debt in heavily indebted poor countries”, Rivista Internazionale di Scienze Sociali,

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