IMPACT OF EXTERNAL DEBT ON NIGERIAN ECONOMY (1985-2011).
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IMPACT OF EXTERNAL DEBT ON NIGERIAN ECONOMY (1985-2011).
ABSTRACT This paper arose from a desire to provide a comprehensive grasp of Nigeria’s economic debt. The overall goal of this study was to assess the influence of external debt on the development of the Nigerian economy between 1985 and 2011.
The models utilised in this study were designed to assess the developmental relationship between the independent and dependent variables. The data were obtained from the Federal Office of Statistics’ CBN statistical bulletin 2011 and the International Monetary Fund (IMF).
The ordinary least squares (OLS) approach was used in the cause of investigation. The Augmented Dickey Fuller test (ADF) also revealed that the variables are reliable for forecasting, whereas the use of OLS was the most appropriate for the study in terms of goodness of fit and regression coefficient significance.
The findings of the analysis found that an increase in external debt has a favourable impact on Nigeria’s economic development, but an increase in external debt services has a positive impact on Nigerian economic development.
Thus, it was concluded that external debt is fast expanding since loans were procured for dubious projects and individual pockets rather than investing the funds in productive endeavours such as increasing exports.
And, as a recommendation, the government should seek external funding for developmental projects while also efficiently monitoring the use of external monies to assure Nigeria’s economic progress.
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