Does external debt impair economic growth in Nigeria?

Maxwell Ekor, Tayo Orekoya, Philip Musa and Osikwemhe Damisah

MPRA Paper from University Library of Munich, Germany

Abstract: The debt and economic growth debate remain topical in Nigeria given the controversies that often trail the government’s plan to always borrow to fund the annual budget deficits. This study provides an empirical contribution to the national discourse by assessing the impact of foreign debt on the Nigerian economy. Applying a dynamic variant of the auto-regressive distributed lag model, the main result from this study is that in the long run, external debt accumulation and the associated service payments have negative effects on the economy. The policy implication is that government should always ensure that external debt accretion is sustainable and used for infrastructure development.

Keywords: Economic Growth; External Debt; Auto-Regressive Distributed lag Model (search for similar items in EconPapers)
JEL-codes: H61 H62 H63 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-cwa and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Journal of Economics and Finance 2.12(2021): pp. 20-26

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:107844

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