Impact of external debt servicing on economic growth in Nigeria: An ARDL approach
Muhammad Abdulaziz, Muhammad
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Nigeria was unbound since debt overhang, due to $18 billion debt write off; there is an alarm of another foreign debt problem in the country, considering its debt profile. This study investigates the impact of external debt servicing on Nigeria’s economic growth through a time-series data between 1985 to 2018 which was managed with Autoregressive Distributive Lag (ARDL) model. Results of the study indicated that in the long-run, external debt servicing will negatively affect economic growth. That is an increase in external debt servicing lead to a decline in economic growth. The study suggests that debt service requirement should not be allowed to increase above the debt stock and, the contracted loan should be devoted to infrastructure development through efficient and judicious utilization.