Impact Of External Debt On The Growth Op Nigerian Economy

ABSTRACT

This work examined the impact of external debt on the growth of Nigerian economy from 1970- 2013. Secondary sources of data collected from National Bureau of Statistics, Central Bank of Nigeria Statistical Bulletin and Debt Management Office were used. Analysis of data was done with the help of e-view Statistical Package. Multiple regression models were used to examine the impact of the explanatory variables (external debt, debt service payments, inflation rates and exchange rates) on dependent variable (economic growth). Regression results show that external debt significantly but moderately impacts positively on economic growth in Nigeria, while debt service payments impact negatively on the economic growth of Nigeria. Also, inflation rates have significant impact on economic growth with exchange rates as well showing a significant impact on the economic growth of Nigeria. The paper recommends that government should place more emphasis on the diversification of the economy so as to generate more funds. If this suggested measure is carried out, it is believed that the external debt burden and repayment wi II be reduced and the economy will grow faster and the standard of living of the citizens will be improved.