EXTERNAL DEBT AND NIGERIAN ECONOMIC DEVELOPMENT UNDER DEMOCRATIC GOVERNMENT (1999 TO 2012): AN EMPIRICAL INVESTIGATION
Keywords:
External Debt, infrastructural development, economic growth, debt servicing and Gross Domestic Product.Abstract
The impact of external debt on economic development is a debatable issue between scholars since the onset of the debt crisis in 1980’s. This paper examines whether external debt affects the infrastructural development in Nigeria between 1999 and 2012. This is carried out by using data for 12 years of civilian administration between 1999 to 2012.The result from estimation shows that external debt affects economic growth by the debt crowding out effect rather than debt overhang. In all the results shows that external debt has significant impact (relationship) on the economic development rate of the nation (Nigeria) in the period under review, this shown on the general model with the R value of 0.951 and adjusted coefficient of determination (R2) value of 0.791, implying that the economic level of Nigeria between 1999 and 2012 is explained by the eternal debt at a rate of 79%. The relationship is a direct relationship.