EXternal debt and Economic Growth 2008-2017

This study examined the effects of external debt on Nigeria’s economic growth (2008-2017). As a guide for the study, research hypotheses were stated. The study adopted a longitudinal trend survey method using ex-post factor model. Instrument for the study was secondary data gotten from CBN Bulletins and annual reports of several years. Data were collected, coded and analyzed using Pearson Product Moment Correlation Coefficient. Analysis from the study revealed that external debt has significant effects on the economic growth of Nigeria. Furthermore, the study revealed that external debt service payments have significant effects on Nigeria’s economic growth. This therefore interprets that external debt service payments have significant effect on Nigeria’s economic growth in terms of total debt service payment and GDP for the period 2008 – 2017. The consequences of huge external debt burden on economic growth in Nigeria includes excessive capital flight, limited production power and insufficient internal savings. Based on the findings from the study, the researcher recommended that: external debt should be contracted solely for economic reasons and not for political or social reasons; government should actively pursue diversification of the economy to ensure a buoyant and robust economy which will reduce external borrowing and; the Debt Management Office (DMO) should always keep track of debt repayment obligations in order to avoid debt overhang.