THE IMPACT OF EXTERNAL DEBT ON STIMULATING ECONOMIC GROWTH IN NIGERIA: MEDIATING ON THE ROLE OF PUBLIC SECTOR FINANCIAL MANAGEMENT

Olaniyan Niyi Oladipo (), Olubunmi Omotayo Efuntade, Falana Tubosun Ayo and Cecilia Dada Taiwo
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Olaniyan Niyi Oladipo: Department of Accounting, Faculty of Management Science, Federal University, P.M.B, Postal: Department of Accounting, Faculty of Management Science, Federal University, P.M.B373, Oye Ekiti, Ekiti State, Nigeria
Olubunmi Omotayo Efuntade: Department of Economics, College of Social and Management Sciences, Afe Babalola University, P.M.B, Postal: Department of Economics, College of Social and Management Sciences, Afe Babalola University, P.M.B5454, Ado-Ekiti, Ekiti State, Nigeria
Falana Tubosun Ayo: Department of Accounting, Faculty of Management Science, Ekiti State University, Ado Ekiti, Ekiti State, Nigeria, Postal: Department of Accounting, Faculty of Management Science, Ekiti State University, Ado Ekiti, Ekiti State, Nigeria
Cecilia Dada Taiwo: Department of Accounting, Faculty of Management Science, Ekiti State University, Ado Ekiti, Ekiti State, Nigeria, Postal: Department of Accounting, Faculty of Management Science, Ekiti State University, Ado Ekiti, Ekiti State, Nigeria

Annals of Spiru Haret University, Economic Series, 2020, vol. 20, issue 4, 101-121

Abstract: This study examined the impact of external debt in stimulating economic growth in Nigeria: mediating on the role of public sector financial management. Secondary data was explored using ex post facto. The variables employed involves Gross Domestic Product (GDP) as endogenous variable while Debt to GDP Ratio (DGR), Foreign Debt to Exports Ratio (FDER), Inflation Ratio (INFR), Interest Service Ratio (ISR) and Exchange Ratio (EXR) as exogenous variables and were obtained from World Bank International Debt Statistic and Central Bank of Nigeria Statistical Bulletin for the period of 1989-2019. Diagnostic tests were conducted using Auto Regressive Distributed Lag (ARDL), Augmented Dick Fuller (ADF) Unit Root Test, and Co-Integration model. The result revealed the presence of co-integration among the variables with clear indication that external debt has a significant and positive relationship with economic growth with strong emphasis on public sector financial management as mediating factor. It was concluded that Nigeria debt crisis was attributed to both exogenous and endogenous factors due to dwindling economy. The study recommends that government should develop home-grown policies to enhance the country’s competitive advantage in the global market. Government should exit from all forms of commercial debts that expose the country to another regime of debt overkill

Keywords: external debt; economic growth; gross domestic product; debt management; debt ratio export (search for similar items in EconPapers)
JEL-codes: H63 (search for similar items in EconPapers)
Date: 2020
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