IMPACT OF DEBT SERVICING ON POVERTY ALLEVIATION IN NIGERIA

AGU, GOODNEWS CHIMAOBI (2026) IMPACT OF DEBT SERVICING ON POVERTY ALLEVIATION IN NIGERIA. Other thesis, Godfrey Okoye University, Enugu.

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Abstract

This research examines how external debt has shaped poverty alleviation outcomes in Nigeria across the 1990–2024 period. Three explanatory factors external debt, interest rate, and debt servicing were modeled against poverty reduction through a multiple regression framework. Stationarity testing came first, using the unit root approach; series were found non-stationary in level form. That result, however, did not rule out a long-run link , a cointegration test confirmed one existed among the variables. With that link established, short-run dynamics were then captured by fitting an error correction model through ordinary least squares. What emerged from the estimation was a clear pattern: external debt, interest rates, and debt servicing all worked against poverty reduction, each showing a negative and statistically meaningful pull on the outcome.. In practical terms, as the burden of external debt repayment grows, interest rates climb, exchange rates fluctuate unpredictably, and debt servicing obligations intensify, the fiscal space available for social welfare initiatives, productive investment, and poverty reduction schemes correspondingly narrows. Drawing on these results, the study puts forward several policy recommendations. First, funds obtained through external borrowing ought to be channeled toward productive sectors capable of generating meaningful developmental returns, rather than non-productive expenditure. Second, monetary authorities should pursue lower lending rates as a means of stimulating investment and employment generation. Third, sustained policy attention should go toward stabilizing the exchange rate, thereby safeguarding purchasing power and containing inflationary pressure. Finally, the government is encouraged to adopt a sustainable approach to debt servicing while simultaneously strengthening domestic revenue mobilization, reducing the need for continued reliance on foreign borrowing to finance poverty alleviation efforts.

Item Type:	Thesis (Other)
Subjects:	H Social Sciences > H Social Sciences (General)
Divisions:	Faculty of Management and Social Sciences
Depositing User:	MICHAEL MADUBUKO
Date Deposited:	10 Aug 2026 11:45
Last Modified:	10 Aug 2026 11:45
URI:	http://eprints.gouni.edu.ng/id/eprint/6229

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