Impact of External Debt on Economic Growth in Nigeria

Ideh, Timothy Ogbemudiare; Uzonwanne, Maria Chinecherem

doi:10.46827/ejefr.v5i2.1156

Cited by 3 publications

(2 citation statements)

References 4 publications

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“…The results show that Nigeria's external debt has a small but negative impact on the country's economic growth. It was thus opined that using tax revenue to pay for the public deficit, encouraging both domestic and foreign direct investment through the improvement of infrastructural facilities, and fostering an environment that was supportive of growth and free from political and economic instability (Ideh & Uzonwanne, 2021).…”

Section: Nigerian Debt Management Issuesmentioning

confidence: 99%

“…Cumulated or in its economic term 'compound interest' adds salt to injury. It is even more shocking to realize that the Nigerian government takes more debt to service the existing ones (Ideh & Uzonwanne, 2021). This is not sustainable as the country will continue to deepen itself in debts that will worsen the economic crisis it already finds itself in.…”

Section: Introductionmentioning

confidence: 99%

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Role of Islamic Law in the Efficient Management of Debt in Nigeria

Zubair,

Muhammed-Mikaaeel

2023

JHN

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Introduction toThe Problem: Nigeria's Q4 2021 Real GDP reached N20.33 trillion, with a 3.98% YoY growth, marking the fifth consecutive quarter of positive growth post-2020 recession. Despite this, the economy is deemed in crisis. Concerningly, the government is accumulating more debt to service existing obligations, posing sustainability issues and conflicting with Shari'ah wealth management principles. Purpose: This study aims to analyze the impact of Islamic law on effective debt management in Nigeria, specifically addressing the consequences of economic crises that result in substantial national borrowing. Additionally, it aims to highlight Sharia jurisprudence as a viable solution to alleviate Nigeria's economic challenges. Design/Methodology/Approach: The Methodology employed in this study is purely doctrinal method of legal research. Hence, the study places reliance principally on the available literature by which the study explores relevant materials such as text books, journals and internet facilities. Importantly, the study finds most useful the primary sources of Shari'ah which are the Qur'an and Sunnah as well as the secondary sources which include Qiyas and Ijma'. Findings: The study finds that the economic crisis which Nigeria has found itself as a result of the multiplier effect of excessive public borrowing cannot be divorced from the adoption of the conventional economic system. The result reveals further that Islamic law plays significant roles in the efficient management of debt as was confirmed in the Malaysian Shari'ah compliant public debt management practices. The study proposes, by way of recommendation, the practice of Islamic Wealth Management to cushion the effect of the deficit budgets and the onerous debts on Nigeria and increase investment activities with a view to impacting positively on the country's GDP. The study is therefore most relevant to the policymakers in the Ministry of Finance, Debt Management Office, as well as the Lawmakers in the country.

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Section: Nigerian Debt Management Issuesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Role of Islamic Law in the Efficient Management of Debt in Nigeria

Zubair,

Muhammed-Mikaaeel

2023

JHN

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The symmetric and asymmetric impacts of external debt on economic growth in Tunisia: evidence from linear and nonlinear ARDL models

Aloulou¹,

Kalai²,

Helali³

2023

SN Bus Econ

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This paper aims to empirically examine the symmetric and asymmetric impact of external debt on economic growth in Tunisia between 1965 and 2019. The empirical methodology used is based on the one hand on the linear autoregressive distributed lag (ARDL) model of Pesaran et al. (Econ Soc Monogr 31:371–413. 10.1371/journal.pone.0184474, 2001), and on the other hand, on the nonlinear ARDL (NARDL) model of Shin et al. (Nucleic Acids Res 42(11):90. 10.1038/s41477-021-00976-0, 2014). The results show that the asymmetry assumption is valid for the long term. In addition, the empirical analysis shows a negative impact of positive external debt variation and a positive impact of negative external debt variation. This suggests that economic growth is more sensitive and favorable to decreases than to increases in external debt, which in turn means that maintaining debt at relatively high levels is detrimental to Tunisian economic growth.

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Panel Data Analysis of the Impact of External Debt on Economic Growth and Inflation: The Case of Emerging Market Economies

Umit,

Dagdemir

2023

Sci. Ann. Econ. Bus.

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This study aimed to analyze the impact of external debt on economic growth and inflation for emerging market economies for the period 1995-2020 using the panel data method. To this end, the study used the data on 12 countries listed in the Morgan Stanley Capital Index (MSCI) Emerging Markets Index. The results of the panel cointegration analysis showed that changes in external debt stock affect economic growth in the opposite direction and inflation rate in the same direction. According to the country-specific results of the panel cointegration analysis, external debt had a negative impact on economic growth in all countries except Mexico, Egypt, India, and Türkiye. External debt increased inflation in all countries except China, Egypt, India, South Africa, and Thailand. The Bootstrap panel causality test results showed a unidirectional causality from economic growth to external debt stock in China, India and Thailand, and a bidirectional causality in China. A unidirectional causality was also found from external debt stock to inflation in Colombia, and a unidirectional causality from inflation to external debt in China, India, Peru, and Thailand. Based on the cointegration analysis results, it is recommended that external debt should be used to finance more productive investments in order to ensure sustainable economic growth in Brazil, China, Colombia, Indonesia, Peru, Philippines, South Africa, and Thailand. The panel causality test results also showed that economic growth in China, India, and Thailand requires more external resources. Based on these results, it is recommended to reduce external debt in order to reduce inflation in Brazil, Colombia, Indonesia, Mexico, Peru, Philippines, and Türkiye.

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Impact of External Debt on Economic Growth in Nigeria

Cited by 3 publications

References 4 publications

Role of Islamic Law in the Efficient Management of Debt in Nigeria

Role of Islamic Law in the Efficient Management of Debt in Nigeria

The symmetric and asymmetric impacts of external debt on economic growth in Tunisia: evidence from linear and nonlinear ARDL models

Panel Data Analysis of the Impact of External Debt on Economic Growth and Inflation: The Case of Emerging Market Economies

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