Impact of external debt on economic growth in Nigeria

Impact of external debt on economic growth in Nigeria

The objective of this study is to examine the long run and short run impact of external debt and external debt service on the economic growth of Nigeria over the period 1980-2013. This study employs Johansen cointegration approach and Vector Error Correction Model for analyzing long-run and short-ru...

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Main Author: Musa, Idris Idris
Format: Thesis
Language:eng
eng
Published: 2015
Subjects:
HG Finance
HJ Public Finance
Online Access:https://etd.uum.edu.my/4694/1/s815007.pdf
https://etd.uum.edu.my/4694/2/s815007_abstract.pdf
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id my-uum-etd.4694
record_format uketd_dc
institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Hassan, Sallahuddin
topic HG Finance
HJ Public Finance
spellingShingle HG Finance
HJ Public Finance
Musa, Idris Idris
Impact of external debt on economic growth in Nigeria
description The objective of this study is to examine the long run and short run impact of external debt and external debt service on the economic growth of Nigeria over the period 1980-2013. This study employs Johansen cointegration approach and Vector Error Correction Model for analyzing long-run and short-run relationships among the selected variables. The causality among the external debt, external debt service and economic growth has also been examined using Granger causality test for the period under consideration. The empirical results show that external debt has a significant negative effect on the economic growth in the long run. External debt service has a significant positive effect on growth in the long run, suggesting no crowding out effect on investment. There is no significant short run relationship among the variables under consideration except for the first lag of real exchange rate, but the error correction term has a moderate speed of adjustment with correct sign and it is significance. The study also finds uni-directional causality running from economic growth to external debt. It is found that there is no causality between external debt service and economic growth. Finally, external debt service has been found to Granger cause external debt, but there was no feedback. Therefore, as policy suggestions, projects to be financed by external debt should be well-appraised and must be self-liquidating, while the guidelines for external debt acquisition and approval should be strengthened.
format Thesis
qualification_name masters
qualification_level Master's degree
author Musa, Idris Idris
author_facet Musa, Idris Idris
author_sort Musa, Idris Idris
title Impact of external debt on economic growth in Nigeria
title_short Impact of external debt on economic growth in Nigeria
title_full Impact of external debt on economic growth in Nigeria
title_fullStr Impact of external debt on economic growth in Nigeria
title_full_unstemmed Impact of external debt on economic growth in Nigeria
title_sort impact of external debt on economic growth in nigeria
granting_institution Universiti Utara Malaysia
granting_department Othman Yeop Abdullah Graduate School of Business
publishDate 2015
url https://etd.uum.edu.my/4694/1/s815007.pdf
https://etd.uum.edu.my/4694/2/s815007_abstract.pdf
_version_ 1747827782694469632
spelling my-uum-etd.46942021-04-04T07:59:12Z Impact of external debt on economic growth in Nigeria 2015 Musa, Idris Idris Hassan, Sallahuddin Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HG Finance HJ Public Finance The objective of this study is to examine the long run and short run impact of external debt and external debt service on the economic growth of Nigeria over the period 1980-2013. This study employs Johansen cointegration approach and Vector Error Correction Model for analyzing long-run and short-run relationships among the selected variables. The causality among the external debt, external debt service and economic growth has also been examined using Granger causality test for the period under consideration. The empirical results show that external debt has a significant negative effect on the economic growth in the long run. External debt service has a significant positive effect on growth in the long run, suggesting no crowding out effect on investment. There is no significant short run relationship among the variables under consideration except for the first lag of real exchange rate, but the error correction term has a moderate speed of adjustment with correct sign and it is significance. The study also finds uni-directional causality running from economic growth to external debt. It is found that there is no causality between external debt service and economic growth. Finally, external debt service has been found to Granger cause external debt, but there was no feedback. Therefore, as policy suggestions, projects to be financed by external debt should be well-appraised and must be self-liquidating, while the guidelines for external debt acquisition and approval should be strengthened. 2015 Thesis https://etd.uum.edu.my/4694/ https://etd.uum.edu.my/4694/1/s815007.pdf text eng public https://etd.uum.edu.my/4694/2/s815007_abstract.pdf text eng public masters masters Universiti Utara Malaysia Adepoju, A. A., Salau, A. S., & Obayelu, A. E. (2007). The effects of external management on sustainable economic growth and development: Lessons from Nigeria. Munich Personal RePEc Archive, (2147). Adegbite, E. O., Ayadi, F. S., & Ayadi, O. F. (2008). The impact of Nigeria’s external debt on economic development. International Journal of Emerging Markets, 3(3), 285–301. Agrénor, P., & Montiel, P. (1996). Development macroeconomics (3rd ed.). Princeton, NJ: Princeton University Press. Ajayi, L. B., & Oke, M. O. (2012). 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