DISAGGREGATED EXTERNAL DEBT AND ECONOMIC GROWTH IN NIGERIA

Abstract

This study investigates the effect of disaggregated external debt on economic growth in Nigeria between 2014 and 2023, with the external debt-to-GDP ratio and external debt-to-export ratio employed as the proxies for external debt and GDP growth, exchange rate, and inflation for measuring economic growth. The period under review captures critical macroeconomic challenges, including oil price shocks, exchange rate volatility, and the 2016 recession, all of which significantly influenced Nigeria’s debt dynamics and growth trajectory. Secondary data were sourced from the Central Bank of Nigeria (CBN), Debt Management Office (DMO), FIRS, and World Bank World Development Indicators (WDI). The study adopts a quasi-experimental research design with econometric analysis to assess the effect of external debt on Nigeria’s economic growth. Findings revealed that rising external debt exerts pressure on Nigeria’s economy, contributing to exchange rate instability and inflationary trends, while economic growth remains sluggish. The study recommends productive utilization of debt and stronger revenue mobilization to achieve sustainability.