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The Impact Of External Debt On Nigeria Economy (1985-2011)
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1.2 STATEMENT OF PROBLEM
Nigeria which was a net lender to
organisations like IBRD, IMF, Paris Club etc. is today one of the highly
indebted countries to these organisations. External debt when
effectively and efficiently utilized is meant to provide some
investments. The returns from these investments will be used in the
settlement of the debt. But in Nigeria, the reverse is the case. The
debt is incurred to service and enrich the private pockets of our
leaders,on behalf of the entire citizenry(Vanguard; 2004). Consequently
upon this, debt servicing has become one of the most consuming elements
of Nigeria‘s annual earnings. The Nigeria‘s unfavourable balance of
payment (BOP) istoday a function of some variables amongst which
external borrowing is rated the most influential factor. The BOP problem
in turn leads to high rate of inflation, import and dependence.
Nigeria‘s external debt has no doubt put pressure on the economic
recovery and growth of the country. This research has actual impact of
the external debt on the economy of Nigeria.
The trend of external
debt shows the state of the economy considering the external debt. Thus,
it shows whether the external debt of the Nigerian economy is
increasing or decreasing. As at 1990 to 1992, the external debt amounted
to 82.3% and from 1993 to 1995, it decreased significantly by 13.2%
while from 1996 to 1998, it further decreased by 2.5%. As at 1999 to
2001, the Nigeria external debt was insignificant. But as at 2002 to
2004 there was a significant increase on the Nigeria external debt
by24.3%, while from 2005 to 2007 the external debt was insignificant.
But 2008 to 2010 showed an increase in the Nigeria external debt by
39.9%.
1.3 OBJECTIVES OF THE STUDY
The objectives of the study are;
i. To determine the impact of external debt on the Nigeria economy.
ii. To determine the effect of external debt services on the Nigeria economy.
1.4 STATEMENT OF HYPOTHESIS
This study is guided by the following hypothesis.
H0: there is no significant effect of external debt services on the Nigeria economy.
H1: there is significant effect of external debt on the Nigeria economy.
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ABSRACT - [ Total Page(s): 1 ]This work evolved out of the zeal to provide an immense understanding of the Nigeria economic of debt. The broad objective of this study was to evaluate the impact of external debt on the development of the Nigeria economy within the life-span of 1985-2011.The models in this study was used to evaluate the developmental relationship between the independent variables and the dependent variables. The data were sourced from the Federal office of statistics, CBN statistical bulletin 2011, and interna ... Continue reading---
