Nigeria government debt to gdp 19902018 data 20192020. The scope of this study shall cover the public debt trend of nigeria over the years to date. The study postulates that external debt does not contribute to the economic growth of nigeria. The impact of public debt on nigerian economy research. An overview of the nigerian economic growth and development. Budget deficits, external debt and economic growth in. The effect of huge external debt of less developed countries is believed to impede investment resources.
D student at department of accounting, nasarawa state university, keffi. The paper examines the relationship between external debt and economic growth in nigeria. This site is like a library, you could find million book here by using search box in the header. Over emphasis on negative impact of debt will cause morbid fear of debt, resulting in debt avoidance when it would have stimulated the economy by bringing in the much needed capital for infrastructural development and investment. So, nigeria can solicit for debt cancellation from its creditors and also adopt debt management as pat of its macroeconomic policies of the nation and finally engage in productive projects. The effect of external debt on economic growth of nigeria, largest undergraduate projects repository, research works and materials. A number of researchers have examined the effect of external debt on economic growth since the beginning of the new millennium. 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.
A time series data for this study was obtained from the secondary source cbn statistical bulletin. This research work was aimed at ascertaining the impact of external debt on economic growth in nigeria. This has informed the need to embark on the present study with a view to investigating the impact of external debt on economic growth of nigeria. This study set out to analyse the impact of external debt on economic growth of nigeria. Impact of external debt on nigeria economy project. This paper will examine specifically, the extent to which variations in nigeria debt structure contributed to the nations economic growth. Expost facto research design was adopted for the study.
The debt crisis if not well managed will lead to liquidity crisis and foreign exchange crisis, which will retard the rate of economic growth and development in nigeria. Literature examining the relationship between reduction in external debt and economic growth gives mixed signals to the policy makers in both the developed and the developing countries. The study offers empirical explanations, and discusses the salient issues of significant management strategy adopted by nigerian government in accordance with executive direction and organization. External debt is acquired in order to finance budget deficit and speed up economic activities, hence, external debt should result to economic growth of a nation. Pdf purpose this paper aims to investigate the impact of huge external debt with its servicing requirements on economic growth of the nigerian.
The literature presents both positive and negative. Ajide1 this paper investigates the role of frazer economic freedom index on fdi growth relationship over the period spanning 1980 through 2010 using annual time series data. This may result from inability to generate enough resources to meet commitments in debt servicing. Some studies on subsaharan africa concluded that external debt is deleterious to growth, but these studies are very scanty.
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. 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. Analysis of external debt and economic growth in nigeria. The nexus between external debt and economic growth in nigeria 1981 2009. The impact of nigerias external debt on economic development. Nigeria in her desperate quest for money to finance economic growth accepted foreign loans under stringent conditions. Scope the study is designed to cover the period of 1992 2004 and concentrates only on the external debt in nigeria and also economic growth. Generally, we found empirical support for an inverted ushape relationship. This paper explores long run relationship between external debt and economic growth in developing economies.
The nexus between external debt and economic growth in. The objective of this study was to determine the impact of nigeria s external debt on its economic growth. The necessity for governments to borrow in order to finance deficit budgets has led to the development of external debt. External debt relief a nd economic growth in nigeria. The broad objective of this study is to determine the impact of external debt on economic growth in nigeria. The impact of government debt on the economic growth of ghana. External debt and domestic debt impact on the growth of.
International journal of innovation and economic development, 25, pp. Doguwa4 this paper investigates the existence of threshold effects in the relationship between public debt and economic growth in nigeria using quarterly data. That the external public debts stocks have no positive impact on the economic growth of nigeria. External debt accumulation has been rising over the years with debt burden indicators increasing steadily in the early 1990s.
May 02, 2017 scope the study is designed to cover the period of 1992 2004 and concentrates only on the external debt in nigeria and also economic growth. By using a sample of 70 developing countries over a period of 19762011, the study finds that increase in external debt stock reduces the fiscal space to service external debt liabilities and thus dampens the economic growth. 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. Nigerias external debt has no doubt put pressure on the economic recovery and growth of the country. Negative impact of external debt on nigeria economic growth. The trend and descriptive analysis assessed the behavior of external debt and economic growth while the empirical analyses employed panel data regression in which a fixed. According to wikipedia 2018 external debt is the total debt a country owes to foreign creditors. Impact of external debt on economic growth in nigeria by idris idris musa a thesis submitted to othman yeop abdullah graduate school of business universiti utara malaysia in partial fulfillment of the requirement for the degree of master of economics. Umoh introduction this article overviews the growth and development of the nigerian economy from inde pendence to present times. The effect of foreign debt on the economic growth of nigeria.
External debt, public investment, and growth in lowincome countries prepared by benedict clements, rina bhattacharya, and toan quoc nguyen1 authorized for distribution by sanjeev gupta december 2003 abstract this working paper should not be reported as representing views of the imf. Gross external debt for nigeria from the world bank for the quarterly external debt statistics release. Moreover, given demand prospects for oil are likely to remain subdued owing to the fastspreading coronavirus covid19, the countryas fiscal and external. Download undergraduate projects topics and materials accounting, economics, education. Impact of external debt shocks on economic growth in nigeria. External debt and domestic debt impact on the growth of the nigerian economy 1 aminu umaru, 2 ahmadu aminu hamidu and 3 salihu musa 1 department of economics, modibbo adama university of technology, yola, adamawa state, nigeria. Analysis of the impact of external debt on economic growth in. The autoregressive distributed lag ardl model was employed as a technique of estimation in the study and the results led a finding that the external debt contribute negatively to growth in nigeria based on data from 1981 through 2016 which was. The rationale for this paper is to establish the relationship between economic growth, external debt and domestic debt in nigeria. Implications of external debt on the nigerian economy. Pdf this research work was aimed at ascertaining the impact of external debt on economic growth in nigeria.
External debt accumulation and its impact on economic growth in. External debt affects the economic growth, the level of money supply and employment in the country. An empirical analysis of the relationship between government external borrowings and economic growth in nigeria. Research question the following question will form the basis of this investigation. Debt relief, external debt, economic growth, nigeria, imf, vec. This study examined the structural break relationship between external debt and economic growth from 1980 to 2009 with a view to examine the effect of external debt relief on economic growth in nigeria. External debt is a vital source of public financing in developing countries and carries the potential to play a key role in promoting. Ajayi and oke 2012 investigated the effect of the external debt burden on economic growth and development of nigeria. Impact of nigerias external debt on its economic growth. The quest for economic growth and development compelled nigeria to acquire external debt. That the public debt stocks have positive impact on the economic growth of nigeria. This research work is on the impact of nigeria s external debt on its economic growth. The trend of external debt shows the state of the economy considering the external. Effect of external debt on economic growth of nigeria.
An empirical analysis of the macroeconomic impact of public. The debtors can be the government, corporations or citizens of another country. Claessens 1990 concludes that the actions taken by creditors to reduce a debtors burden of debt will benefit both parties. Ali 2012, external debt plays both a positive and negative role in shaping economic growth, particularly of the developing countries. This research investigates the impact of external debt on economic growth in nigeria from 19802014 using the vector error correction model. External debt, economic growth, development, financing, global marketing.
Using time series data for the period 1970 95, the empirical results indicated that external debt accumulation has a negative impact on economic growth and private investment. External debt relief and economic growth in nigeria. Content licence especially creative commons licences, you may exercise further usage rights as. Effects of external debt accumulation on investment and economic growth of the country are always. Loan or borrowing to fund gaps in government revenue has become norm in subsahara africa especially in nigeria. Surges in revenue and unpredictable external funding makes borrowing internally strategic through development of the domestic debtbond. Effect of external borrowing and foreign aid on economic. This paper therefore is set to investigate the impact of external debt, and domestic debt on economic growth in nigeria between 19702010 through the application of ordinary. With the oil glut and reduced revenue, it is expected that our external debt liabilities will increase and our economy will be unstable. Effects of public external debt and private investment on. The study set out to test for both a long run and causal relationship between external debt and economic growth in nigeria. An empirical analysis of the relationship between government.
Abstract this study examines the impact of external debt on the level of economic growth and the volume of investment in nigeria between 1980 and 2008. External debt, domestic debt, economic growth gdp and. They use a solowtype neoclassical growth model to regress the ratio of external debt to gross domestic. The impact of external debt on economic growth is a debatable issue between scholars since the onset of the debt crisis in 1980s. Impact of rising external debt on economic growth the. For debt to promote growth in nigeria and other highly indebted. Determinants of economic growth in nigeria kazeem b. Theoretical perspective of external debt relief and economic growth the position of economic theory on the relationship between external debt relief and economic growth is vital to this study. Nigeria public external debt 20082019 data 20202022. This study examines how the use of budget deficits as an instrument of stabilization leads to the accumulation of external debt with the attending effects on growth in nigeria. Analysis of external debt and economic growth in nigeria, largest undergraduate projects repository, research works and materials. External debt and domestic debt impact on the growth of the. Introduction external debt burden in nigeria can be traced to so many factors in the past which caused the growth of the economy to decline alongside its development.
This study concluded that the resultant effects of external debt on economic development in nigeria are negative and significant. This research has actual impact of the external debt on the economy of nigeria. The examination of debt burden indicators suggests the increasing burden of external debt, with a significant increase in the size and magnitude of such debt during 1990s. Debt has become inevitable phenomenon in nigeria, despite its oil wealth. Determining the optimal public debt threshold for nigeria1. 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. Impact of external debt on economic growth in nigeria. Determinants and sustainability of external debt in a. In the longterm, the nigeria government debt to gdp is projected to trend around 40. This paper investigates the dynamic effects of external debt on economic growth in nigeria from 1970 through 20. Between the period of 1950 1960, nigeria had a magnificent. A multivariate regression approach was employed to estimate augmented growth.
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. An assessment of the impact of external debt on economic. 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. The necessity for governments to borrow in order to finance a deficit budget has led to the development of external debt. Data for the study are collected from secondary sources. Nigerias external debt had its origin in 1958 when a loan of usd28 million was obtained from the world. The study examines the impact of external debt servicing on the nigeria economic growth rate. External debt and growth dynamics in nigeria adamu. Akujuobi 20o7 concluded that external debts contributed negatively to nigeria s economic growth as opposed to domestic debt which contributed positively to nigerias economic growth. In another single country study, adegbite 2008 investigate the impact that nigerias et al. Effects of public external debt and private investment on agricultural growth in nigeria. The empirical observation shows the external debt flow having positive effect on economic growth. Pdf external debt, economic growth and investment in.
This study analyzes trends and investigates the relationship between external debt and economic growth in the wamz using descriptive trend analysis and panel data analysis. The bop problem in turn leads to high rate of inflation, import and dependence. Nigeria s foreign debt has breached a 15year trigger. This book examines the determinants of economic growth for pakistan, the impact of domestic debt and external debt on the. 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. The effect of external debt on economic growth in sub. The burden of nigeria s external debt is more than the country can bear and the state of economic growth in the country is hampered due to debt crisis. Pdf the impact of nigerias external debt on economic. Government debt to gdp in nigeria is expected to reach 55. External debt, public investment, and growth in lowincome. The debt problem facing nigeria is concerned on how to stop incurring more debts and device a way of servicing the existing debt without causing some distortions in the economy.
If the documents have been made available under an open. This page provides forecast and historical data, charts, statistics, news and updates for nigeria gross external debt. Oct 26, 2017 this paper uses a structural vector autoregression generalized economic growth model augmented with a debt variable to characterize the dynamic impact of innovations to external public debttogdp ratio on per capita gdp growth, investment, trade openness, exchange rate and inflation in nigeria over the period 19702014. The debt forgiveness saw nigerias total debt and external debt plummeting by. A priori expectation was that external debt would bring about economic growth. We adopt the debt cum growth model along with the investment model while the econometrics analysis. A multivariate regression approach was employed to estimate augmented growth models. Determining the optimal public debt threshold for nigeria1 babatunde s. Impact of domestic and external debt on economic growth of. All books are in clear copy here, and all files are secure so dont worry about it. This paper therefore is set to investigate the impact of external debt, and domestic debt on economic growth in nigeria between 19702010 through the application of ordinary least square method to establish a simple relationship between the variables under study, augmented dickeyfuller technique in testing the unit root property of the series. According to abubakar 2011, nigeria has been utilizing the external debt to the extent that the debt becomes so huge to water down substantial part of the countrys revenue.
World bank national accounts data, and oecd national accounts data files. This page provides nigeria external debt actual values, historical data, forecast, chart, statistics, economic. Sustainable economic growth has crucial importance for all economies, especially for the developing economies like pakistan, which faces many different challenges as compared to developed countries in boosting up its economic growth in order to lower its debt burden. 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.
Impact of external debt financing on economic development. Nigeria s rising external debt to export ratio suggests that total debt is growing faster than the economy s major source of external income, indicating that the country may have problems meeting its debt obligations in the future. Gross domestic product, external debt services, external debt stock, external reserve, and exchange rate. The nexus between external debt and economic growth in nigeria. Limitations in the course of carrying out this study, some problems were encountered which ranges from non availability of relevant recent data to the paucity of available ones. This study examines how the use of budget deficits as an instrument of stabilization leads to the accumulation of external debt with the attending effects on growth in nigeria between 1970 and 2003. External debt contributes an essential part in the growth of an economic system and total external debt has been a center of attention for economic experts and researchers. Nigeria gross external debt moodys analytics economy.