Godwin Emezanena Iboma, Stephen Onyeanwuna Osakwe



This study is aimed at ascertaining the impact of external debt on economic growth in Nigeria. Ex-post facto research design was adopted for the study. Data on Real Gross Domestic Product (GDP), Public debt, Domestic debt, Capital expenditure and Recurrent expenditure were collected from Central Bank of Nigeria Statistical Bulletin, 2018. Model was formulated and data were analyzed using Ordinary Least Square. Diagnostic tests were conducted using Augmented Dick Fuller Unit Root Test, correlation and causality test. The independent variable was RGDP, while the explanatory variables were Domestic debt, Capital expenditure and recurrent expenditure. We discovered that External Debt had a positive relationship with Real Gross Domestic Product had a negative relationship. While Domestic had negative relationship with Real Gross Domestic Product (RGDP), capital expenditure had a negative relationship with RGDP. The paper concluded that recurrent expenditure had negative impact on the Nigerian economy but not significant. The study recommended amongst others, that Debt Management Office should set mechanism in to ensure that loans were utilized for purposes for which they were acquired as well as set a ceiling for borrowing for states and federal governments based on well-defined criteria. 


Keywords: External debt, Real Gross Domestic Product, Domestic debt, Capital expenditure and Re-current expenditure

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