The Nigerian Debt Problem: Causes, Consequences and Option

Okoye, Emmanuel Ikechukwu

doi:10.2139/ssrn.1804233

Cited by 3 publications

(6 citation statements)

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“…It is worth to note that over 90% of the Nigeria's foreign exchange earnings is fundamentally from oil export, which serve as a major source for funding government expenditure and there was no effective contingency plans for savings to bail the financial difficulties in the case of oil price crisis. This result coincides with the earlier findings by Okoye (2000) and Adamu and Rasiah (2016b) and the views of Corden andNeary, 1982 andManzano andRigbon (2007) respectively. The coefficient of gross domestic savings is -0.208, negative and statistically significant at the 5% level.…”

Section: Resultssupporting

confidence: 93%

“…The inadequate domestic savings rates had forced the nation to borrow more, which eventually, aggravates the stock of external debt. This finding is in line with the study of Okoye (2000). Also, it is conform to a priori expectation of the theoretical analysis of the capital accumulation theory championed by Chenery and Strout, (1966) among others.…”

Section: Resultssupporting

confidence: 92%

“…However, empirical studies at the country level have produced mixed results despite a number of different methodologies, scope and period. For instance, Using descriptive analysis, Okoye (2000) analyse the causes of external debt in Nigeria and found that a poor productive base made the economy dependent on imports, had led to a considerable increase in import bills. The decline in foreign exchange earnings following the collapse in the oil prices in the early 1980s increased in the international interest lending rate, and huge expenditures on projects with zero economic viability have raised the Nigeria's external debt.…”

Section: Review Of Related Literaturementioning

confidence: 99%

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Re-visiting the Drivers for Increasing External Debt

Adamu

2019

JCIT

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This paper investigates the drives for increasing external debt in an open economy Nigeria over the period 1970 to 2017 using general to specific approach (GETS) approach (Hendry, 1995). The Johansen cointegration test confirms that variables have long run relationship. The empirical results for both long run and short run estimates indicate oil price, domestic savings and fiscal deficits play a significant role in increasing external debt in Nigeria. The study also found evidence that the dummy variables for exchange rate and debt relief also accelerate the growth of external. This finding indicates that, after the multilateral debt relief between 2005 and 2006, fresh loans are still coming to Nigeria. To this end, Nigeria should focus on investment in real sectors especially in agriculture and manufacturing to increase export performance. This would enable the country to generate adequate foreign earnings and stimulate domestic savings, and reduce reliance on oil revenue.

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Section: Resultssupporting

confidence: 93%

Section: Resultssupporting

confidence: 92%

Section: Review Of Related Literaturementioning

confidence: 99%

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Re-visiting the Drivers for Increasing External Debt

Adamu

2019

JCIT

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“…Even though the ratio of public debt to real GDP is around 29% [34], the upward trend is worrisome because increasing debts means increasing liability to service the debts. Huge public debts might crowd out private sector investment and inhibit efforts to finance capital infrastructure [37].…”

Section: Findings and Discussion Of Resultsmentioning

confidence: 99%

Impact of Public Debt on Economic Growth in Nigeria (1990 to 2019)

Edeminam¹

2021

aeb

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This study examines the impact of public debt on economic growth in Nigeria using annual time series data from 1990 to 2019 collected from Central of Nigeria statistical bulletin. The variables are Real GDP, public debt, Inflation, debt to GDP ratio, debt servicing to GDP ratio, and exchange rate. Empirical analysis was conducted using Augmented Dickey Fuller unit root test to check for stationarity. Johansen Cointegration test was used to determine long run relationship and Vector Error Correction Model to check for short run and long run impact of public debt on economic growth. Empirical results showed that the impact of public debt on economic growth was negative and significant in the long run. The impact of public debt on economic growth was negative but insignificant in the short run. In addition, the impact of ratio of debt servicing to GDP was significant and negative in the short and long run. There was no causality between public debt and economic growth. The study recommends that public authorities in Nigeria should reduce reliance on public debt and instead move towards increasing revenues through diversification of the export base of the economy and expanding the tax net. The study also recommends strengthening public institutions so that revenues collected, in the form of debt or other means can be adequately utilized on investments that are efficient.

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“…The resultant debt crisis meant that substantial amount of oil revenue were expended on servicing the accumulated external debts annually" [18]. The largest source of increase in Nigeria's external debt and the ensuring debt crisis is accumulated trade arrears which came up in 1981 and has been re-financed through subsequent debt service difficulties [19]. The total trade arrears grew rapidly from N2 billion in 1982 to N47.6 billion (i.e.…”

Section: Historical Review Of Debt Crisis and Nigerian Economymentioning

confidence: 99%

Debt Crisis and Nigerian Economy: An Assessment of the Buhari Administration (2015-2021)

Fatima

Olasunkanmi²

2023

JEMT

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External debt or recourse to loan borrowing is an effective measure providing alternative funding to augment limited monetary resources of a country in her quest for economic development. This loan, when appropriately used, advance infrastructural development that brings great dividend to the citizens but a departure from this put pressure on the economy which might lead to economy doldrums. Therefore, the aim is to examine if continuous loan actually generate economy buoyancy The study use qualitative analysis. Hence, it adopts a case-study research design approach. Primary data were generated from interviews with experts in the field of debt management and researchers in the area of political economy. Also, secondary data such as; journals, articles, books, library websites, newspapers, theses and dissertation and Debt Data documented by the Debt Management Office (DMO) available for a seven-year period (2015-2021). The paper found out that mismanagement and misappropriation of borrowed funds are the bane of development in Nigeria. Also, government neglect to economy diversification has made recourse to loan taking desirable as a source of alternative revenue for the country. Therefore, it was recommended that better debt policies to restructure and checkmate debt profile in Nigeria should be instituted while diversification of the economy will address the debt-to-revenue ratio impact of borrowing.

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The Nigerian Debt Problem: Causes, Consequences and Option

Cited by 3 publications

References 1 publication

Re-visiting the Drivers for Increasing External Debt

Re-visiting the Drivers for Increasing External Debt

Impact of Public Debt on Economic Growth in Nigeria (1990 to 2019)

Debt Crisis and Nigerian Economy: An Assessment of the Buhari Administration (2015-2021)

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