External Debt and Economic Growth in Nigeria (1990–2023)

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@article{1719391,
      author = {Easterday Ebi Ayebaitari, Ijeoma Kalu, Sylvester Udeora, Adeyemi Ismail Salami},
      title = {External Debt and Economic Growth in Nigeria (1990–2023)},
      journal = {Iconic Research And Engineering Journals},
      year = {2026},
      volume = {10},
      number = {1},
      pages = {209-225},
      issn = {2456-8880},
      url = {https://www.irejournals.com/formatedpaper/1719391.pdf},
      abstract = {This study examines the impact of external debt on economic growth in Nigeria over the period 1990–2023. Specifically, the study investigates how external debt, debt servicing, exchange rate, and money supply influence Real Gross Domestic Product (RGDP), which serves as a proxy for economic growth. The study adopts an ex-post facto research design and utilizes annual time-series data obtained from the Central Bank of Nigeria (CBN) and the Debt Management Office (DMO). The Autoregressive Distributed Lag (ARDL) modelling approach was employed to estimate both the short-run and long-run relationships among the variables. Prior to estimation, the Augmented Dickey–Fuller (ADF) unit root test was conducted to determine the stationarity properties of the series, while the Bounds cointegration test confirmed the existence of a long-run relationship among the variables. The empirical results reveal that money supply exerts a positive and statistically significant impact on economic growth in both the short run and long run. Debt servicing, however, shows a negative effect on economic growth, indicating that increasing repayment obligations reduce funds available for productive investment. External debt exhibits a positive but statistically insignificant relationship with economic growth, suggesting that external borrowing has not significantly contributed to Nigeria’s economic performance. Exchange rate movements show a positive short-run effect but a negative long-run influence on economic growth. The study concludes that although external borrowing can support development, its effectiveness depends largely on efficient utilization and prudent debt management. The study recommends that government should ensure that borrowed funds are directed toward productive sectors of the economy while strengthening debt management policies to enhance sustainable economic growth.},
      keywords = {External Debt, Economic Growth, Debt Servicing, Exchange Rate, Money Supply, ARDL, Nigeria.},
      month = {July},
      doi = {https://doi.org/10.64388/IREV10I1-1719391}
  }