Acta Universitatis Danubius. Œconomica, Vol 14, No 7 (2018)

External Debt and Nigeria’s Economic Growth

Omorose Aigbedo Ogiemudia, Ikponmwosa Michael Igbinovia

Abstract


We examine the influence of external debt on Nigeria’s economic growth. Annual data having time series properties on external debt, external debt service, external reserve, exchange rate, foreign direct investment and economic growth proxy by changes in RGDP from 1981 to 2017 were obtained from the statistical bulletin issued by Nigeria’s apex bank. Analyses focused on using both descriptive statistical and error correction model methods. From the analyses, it was found that the influence exerted by External Debt on Nigeria’s economic growth is insignificant and negative when examined in the short run while it significantly exert a negative influence on the economy in the long run. Stimulated by our findings, we conclude that Nigeria has not begun to reap significantly, from efficient sourcing and effective utilization of external debt, as its sway on economic growth of Nigeria in both short and long run period considered in this study is negative

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