External financing for economic sustainability in Nigeria:exploring options that thrive

Abubakar Sule, Naomi Onyeje Doki and David Terfa Akighir
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Naomi Onyeje Doki: Department of Economics,Benue State University,Makurdi,Nigeria
David Terfa Akighir: Department of Economics,Benue State University,Makurdi,Nigeria

Romanian Journal of Economics, 2024, vol. 58, issue 1(67), 94-108

Abstract: This study investigated the effect of components of external financing on economic sustainability in Nigeria with a view to determine the effect and decide which options are most appropriate in the light of the fact that external financing is still relevant to augment a deficient capital base. The Autoregressive Distributed Lag (ARDL) model and Wald Test were employed on the data from 1999 Q1 to 2022 Q4. The bounds test revealed that there is a strong long run significant relationship between external financing and economic sustainability. Foreign direct investment, foreign portfolio investments and official development assistance are the sources that present feasible alternatives for Nigeria. Remittances and external loans have produced negative effects in the period under study. Thus, it is recommended that the impact of external financing on economic sustainability could be enhanced through improvements in the absorptive capacity of the economy and ensuring macroeconomic and socioeconomic stability.

Keywords: external financing; foreign direct investment; economic sustainability; industrial production index; savings (search for similar items in EconPapers)
JEL-codes: E21 E23 F21 F24 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ine:journl:v:58:y:2024:i:67:p:94-108

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