Effect of External Debt on Economic Growth and Development of Nigeria

Abstract

This study investigates the effect of the external debt burden on economic growth and development of Nigeria .It adopted regression analysis of OLS on secondary data sourced from CBN, Economical and Financial review, Business times, Financial Standard and relevant publication from Nigeria on variable like National Income, Debt Service Payment, External Reserves, Interest rate among others. The finding indicates that external debt burden had an adverse effect on the nation income and per capital income of the nation. High level of external debt led to devaluation of the nation currency, increase in retrenchment of workers, continuous industrial strike and poor educational system. This led to the economy of Nigeria getting depressed. Based on the finding the study suggest that debt service obligation should not be allowed to rise than foreign exchange earning and that the loan contracted should be invested in profitable venture, which will generate a reasonable amount of money for debt repayment

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