AN EVALUATION OF THE EFFECT OF EXTERNAL DEBT ON ECONOMIC GROWTH INDICES IN NIGERIA

UGWU, James Ike and Dr. Nzewi, U.C (2016) AN EVALUATION OF THE EFFECT OF EXTERNAL DEBT ON ECONOMIC GROWTH INDICES IN NIGERIA. In: International Conference of Faculty of Management Sciences, 8th-10th November, Nnamdi Azikiwe University, Awka; at the University Auditorium.

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Abstract

ABSTRACT The study sets out to determine whether external debt has significant relationship with economic growth indices in Nigeria. Ex-post facto research design was adopted for the study. Data on gross domestic product, external debt, capital expenditure, and exchange rate were obtained from Central Bank of Nigeria Statistical Bulletin 2013 for the period 1981- 2013. Ordinary Least Square Method of regression was used in which external debt was regressed on gross domestic product, capital expenditure, and exchange rate. Diagnostic test was done using Augmented Dickey Fuller (ADF) unit root test, co integration and error correction method. Findings show that there is a positive relationship between external debt on one side and gross domestic product (GDP), exchange rate and capital expenditure. The implications of the findings are that small external debt accumulation stimulates the economy while huge debt has negative impact. External debts were misappropriated while debt servicing and repayment stifles infrastructural development .The study recommends, amongst other things, that external debt should be obtained when it is absolutely necessary and applied for productive ventures but not for social services, ensuring that the marginal productivity of the loan is greater than the interest incurred as a result of it while anti corruption agencies should be strengthened by government to reduce embezzlements and misappropriations to the barest minimum by reviewing laws establishing them.

Item Type: Conference or Workshop Item (Paper)
Subjects: H Social Sciences > HG Finance
H Social Sciences > HJ Public Finance
Divisions: Faculty of Management and Social Sciences
Depositing User: mrs chioma hannah
Date Deposited: 19 Sep 2019 08:48
Last Modified: 19 Sep 2019 08:48
URI: http://eprints.gouni.edu.ng/id/eprint/2001

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