EFFECT OF EXTERNAL DEBT ON ECONOMIC GROWTH OF NIGERIA.
Need help with a related project topic or New topic? Send Us Your Topic
DOWNLOAD THE COMPLETE PROJECT MATERIAL
EFFECT OF EXTERNAL DEBT ON ECONOMIC GROWTH OF NIGERIA.
ABSTRACT
This paper arose from the desire to provide a thorough grasp of the economics of debt in Nigeria. This study examines the impact of external debt on economic development between 1981 and 2010.
The broad goal of this paper is to assess the influence of external debt stock and debt servicing on economic development. All models were designed to demonstrate an increasing relationship between the independent variables (inflation rate, exchange rate, interest rate, government expenditure, foreign debt stock, and external debt service) and the dependent variable (GDP).
The data were gathered from the CBN Statistical Bulletin 2010 and the Debt Management Office’s (DMO) quarterly report. Engle & Grenger Cointegration and Ordinary Least Squares (OLS) were used in this investigation.
The ADF demonstrates that the variables are stationary and dependable for predicting. In terms of goodness of fit and regression coefficient significance, the OLS method is the best fit for this investigation.
The analyses revealed that expanding foreign debt stock slows Nigeria’s economic growth by increasing the cost of payment above the debt sustainability limit, whereas external debt servicing did not hinder economic growth.
Summary and policy suggestions were presented in accordance with our stated objectives and facts, and conclusions were drawn. It was discovered that external debt stock increases rapidly as compound interest accumulates, and loans were obtained for dubious enterprises.
The policy recommendations included increasing Nigeria’s export base by investing borrowed cash in productive businesses, as well as seeking fixed interest payment changing amortisation programmes and multi-year rescheduling.
Need help with a related project topic or New topic? Send Us Your Topic