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EXTERNAL DEBT AND ECONOMIC GROWTH IN NIGERIA
Abstract
The paper examines the relationship between external debt and the Nigerian economic growth between 1980 and 2016. Auto-Regressive Distributed Lag (ARDL) and descriptive statistics were applied. The results explain that external debt has significant inverse relationship and impact on Nigeria’s economic growth. Consequently, contrary to the expected relationship, external debt in Nigeria does not promote economic growth. Diagnostic tests also disclose efficiency and consistency of the model. It was further shown that the model residuals are normally distributed with no autocorrelation among the series. It is recommended that external debts obtained should be efficiently utilized towards productivity. Long-term policy should be centered towards the disbursement of the debt loan in order to address both short run and long run socio-economic problems.
Keyword: Nexus, External Debt, Economic Growth.