Journal Screenshot

International Journal of Academic Research in Economics and Management Sciences

Open Access Journal

ISSN: 2226-3624

Impact of External Debt and its Services Burden to Economic Growth in Africa: Econometric Evidence from Nigeria 1990-2016

Clifford Anene Ezema, Ngozi Mabel Nwekwo, Benjamin Chukwuma Agbaji

http://dx.doi.org/10.6007/IJAREMS/v7-i3/4643

Open access

Nigeria as a nation falls under the classification of the highly indebted poor countries (HIPCS). Countries that fall under this have continued to experience problems in managing and servicing their huge stocks of external debt. The relatively high level of Nigeria’s external indebtedness and rising debt burden despite effort by different government to pay off or receive debt fugitiveness has a serious implication on the country’s development and suitability initiatives. This work empirical analyzed the impact of external debts on the economic growth in Nigeria, 1990-2016. The objective of this study is to assess the impact external debts on the economic growth in Nigeria and to determine the impact external debts service to gross domestic products (GDP). The study made use of ordinary least square regression model for short run and Johansson cointegration for long run relationship, Result reveals that external debt positively and significantly impacted on economic growth of Nigeria but external debts services negatively and significantly impacted on economic growth in Nigeria. The findings of the study show that Nigeria external debt is play significant roles in improving economic growth of Nigerians but accumulation of external debt services has been rising over the years with debt burden indicators increase steadily in the 1990s and early 2016,even after the Paris debt relief granted to Nigeria. This confirms that the existence of an external debt service over time has been a problem that refused to be arrested in Nigeria and must be carefully handled to enjoy the dividend of external debt as a package.

Adedeji, M.T. (1989). Relationship and causality links between Foreign debt and Exchange rate to economic growth. Evidence from economy of Nigeria. Journal of Social Sciences and Humanities, 4(2), 459-471.
Ajisafe,N. Nassar, B.C & Gidado,S. A (2006).Effect of Foreign debt on GDP in Tanzania .Policy Research Working Paper WPS 1265.
Aribawe, A. (2003). Impact of Foreign Exchange parallel premium to external debt in Zimbabwe. Email. Almac 772002@yahoo.com Affiliated to the Department of Economics, University of Pretoria South Africa.
Ajasafe, B.D (2006) Impact of Foreign debt to the Economy. An Empirical Analysis of Vietnam. Journal of Griffith Business School, Queen and Australia 23(3) 302-310.
Adedeji H. (1984) “The Macroeconomics of Public Sector deficits’ World Bank
Country Economic Department Working Paper No.775.
Alfredo,D.& Fransisco,G(2004). Determinant of external debt statistics and its relationship to Economic Growth in Ethiopia. AERC Research 107.
Adedeji H. (1989) “The Macroeconomic variables and external debt in Nigeria’ World Bank
Country Economic Department Working Paper No.775.
Ajayi, I (1991) . Impact of external debt size to economic growth in Nigeria. Journal of African Economic 3(3).
Caporate. G, Maria, & Cerrato, Mario, (2005), “Impact of black Market on Real Exchange Rate in six emerging economics of the world. University, Middlesex UK.
Camicheal,A.M.(2016).long run impact of external debt to Ecaudorian Economic Performance after Structural Adjustment Era. NG Journal of Social Development 5(2).
Eaton, L., & Gerrsorita, B. (1991). Impact of Macroeconomic Forces to external debt, Some Empirical Evidence from Pakistan, Asian Journal 11(7) 89-102
Ezeabualishi, O, (2011). Relationship of external debt variables and economic growth in Zambia Journal of Research on Commerce and Management. 2(6)29-32.
Ejiga M.Y & Yeliu, C.P (2013). Impact of external debt to economic growth in Sudan. A paper prepared for ERF 23rd Annual conference, Ammar, Jordan march 2017.
Ekwe , G. (2010) Effect of macroeconomic variables to external debts and Stock Market: Nigeria Perspective, International Journal of Financial Research, 5(4), 120-127
Ekpo, J.D. (1980). Impact Foreign debt to Macro Economic Performance in Nigeria. AERC Research paper 123.
Foser, S. (2006). Long run effect of Foreign external debt to economic growth Caribbean Countries Yale University Discussion paper, 876, Gossai.
Hassan, M. & Mamman, N. (2013). Impact of external debt statistics to Economic Growth Evidence from a 25 Developing and Emerging Market Economy in the world. http://www.economicbulletin.edu.2013.
Ishan, S.(2004) India’s External Debt: Analysis of growth, Causes, Management and
Impact. Department of Applied Business Economics. Faculty of Commerce
DAYALBAGH Educational Institute (Deemed University journal 6(2).
Kasidi, C. K & Said, S.M.(2013). Impact of external debt to economic growth in Ghana. AERC Research paper 24.
Onah, F.N.(1994). Fiscal and Quasi effect of the external debt statistics to Economic Growth in Nigeria. AERC, Niraobi, Kenya.
Olukoshi, S.Z (1998). The economic crisis in Iraq and the National Project for
Changes, External Debt crises. Journal of New Culture, Issue (299), p.67.
Olukoshi, T. (1998). Impact of Foreign debt to Macro Economic Performance in Tanzania. Policy Research Working Paper. 12569.
Omokoro, J. E. (2016). Financial Deepening Economic Growth and external debt. Evidence from Selected sub-Sahara African countries. African Economic Research Consortium (AERC) Research Paper 42.Namabia
Obikwe, R. C. (2014).Causal Relationship existing External debt and macroeconomic performance in Nigeria: A post structural adjustment programme investigation. Global Journal of Management and Business Research Finance, 13(7), 43-48.

In-Text Citation: (Ezema, Nwekwo, & Agbaji, 2018)
To Cite this Article: Ezema, C. A., Nwekwo, N. M., & Agbaji, B. C. (2018). Impact of External Debt and its Services Burden to Economic Growth in Africa: Econometric Evidence from Nigeria 1990-2016. International Journal of Academic Research in Economics and Management Sciences, 7(3), 232–250.