EXTERNAL DEBT AND NIGERIAN'S ECONOMIC GROWTH, (1975 -1995).

No Thumbnail Available
Date
1999
Authors
MGBE, INNOCENT
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
This work traced the origin o Nigeria external debt to 1958 when a loan of U.S. $28 million was contracted for railway construction. The thesis established within theoretical framework the justification for external borrowing which is basically the existence of the saving-investment gap and that of the foreign exchange gap. Growth and development will seriously be retarded in any economy with these gap. Thus, the need to fill these gaps. We have therefore consciously employed the external borrowing approach to sec how far external debt has contributed to economic growth in Nigeria and also to show the structure and magnitude of Nigeria's external debt as well as her debt servicing capacity. We discovered that the structure has changed from what it was in late 1970s and early 1980s to what it is today. That is, borrowing pattern has been gradually shifting from short-term to medium and to long-term periods. We also noted that the source has changed significantly from mutilateral to private and international capital markets (ICM) which were characterised by high and floating interest charges and that this and other factors contributed to the astronomical increase in the magnitude of debt since 1980s. We also, from the examination of various debt ratios, proved that the debtServicing capacity of the country has been on the decline since 1980s and this is as a result of poor economic planning, debt management and utilisation problems as well as corrupt practices. From our empirical estimation we discovered that external debt exerted positive impact on real GDP from 1975 to 1995. On the other hand debt servicing exerted negative impact on real GDP. When the two effects were considered simultaneously it was found that the negative effect of debt servicing out weighted the positive effect of external borrowing.. Based on our findings, we recommended that debt management strategies that would adequately take care of the existing debt problems should be put in place for any meaningfully economic growth to take place and that further loans must be for viable projects. Finally, we suggest that debt servicing ratio be peged between 7% to 10% of export earnings
Description
A THESIS SUBMITTED TO THE POSTGRADUATE SCHOOL, AHMADU BELLO UNIVERSITY ZARIA, IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER OF SCIENCE IN ECONOMICS DEPARTMENT OF ECONOMICS. FACULTY OF SOCIAL SCIENCES AHMADU BELLO UNIVERSITY, ZARIA. 1999
Keywords
EXTERNAL,, DEBT,, NIGERIAN'S,, ECONOMIC
Citation
Collections