EFFECTS OF SELECTED FOREIGN DEBT COMPONENTS ON NIGERIAN ECONOMY

Authors

  • Amadi, Kingsley Wobilor Federal University Wukari, Taraba State, Nigeria
  • Ahuekwe, Chikodi Federal University Wukari, Taraba State, Nigeria
  • Eze, Ifeyinwa Lillian Federal University Wukari, Taraba State, Nigeria

Keywords:

Foreign debt, bilateral debt, multilateral debt, debt service, Growth

Abstract

External debt is a critical tool used by the government to fund her spending capacity, especially when it is difficult to raise taxes and reduce public expenditure as well as a significant shortfall in domestic savings to finance productive activities and provision of infrastructure. On this basis, this study is aimed at investigating the effect of foreign debt components on the growth of Nigerian economy. The study adopted econometrics analytical method rooted on Autoregressive Distributed Lag (ARDL) technique using time series data from 1986 to 2023. The empirical results from ARDL revealed a long run relationship between the variables used in the study. Bilateral debt and debt service payment have a negative and significant effect on economic growth, while multilateral debt has a positive and insignificant effect. Also, 95 percent of disequilibrium in the short run is corrected each year. The study recommends that government should diversify their economic base in other to improve their internally generated revenue as well as improve the ease of doing business in the country in other to attract more investors and generate more revenue in the country and government should go for long term external debt and concessional loan that have minimal effect to service.

Author Biographies

Amadi, Kingsley Wobilor, Federal University Wukari, Taraba State, Nigeria

Department of Economics,
Federal University Wukari, Taraba State, Nigeria

Ahuekwe, Chikodi, Federal University Wukari, Taraba State, Nigeria

Department of Economics,
Federal University Wukari, Taraba State, Nigeria

Eze, Ifeyinwa Lillian, Federal University Wukari, Taraba State, Nigeria

Department of Economics,
Federal University Wukari, Taraba State, Nigeria

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Published

2024-01-29

How to Cite

Amadi, K. W., Ahuekwe, C., & Eze, I. L. (2024). EFFECTS OF SELECTED FOREIGN DEBT COMPONENTS ON NIGERIAN ECONOMY. FUW-International Journal of Management and Social Sciences, 9(1), 144–155. Retrieved from https://fuw-ijmss.com.ng/index.php/fijmss/article/view/69