An assessment of the impact of external debt on economic growth of nigeria david t udoffia, msc, etido a akpanah, msc the main aim of this work is to assess the impact of external debt on economic growth of nigeria 2 literature review 21 effect of debt service on economic growth, policy makers have enjoined to thoroughly. As debt servicing tends to increase, there will be fewer opportunities for economic growth methodology many studies have been done in order to understand the impact of foreign debt on growth. Debt overhang creates adverse incentive effects on the economic growth in the long run other channels through which the need to service a large amount of external obligations can affect economic performance include the crowding out effect.
In the long term however, and beyond a certain “threshold” debt level, debt appears to have negative economic growth and current account effects, driven by the lower efficiency of investment as debt increases, as well as capital and labour productivity effects and “crowding out” effects. In the paper the real effects of debt, authors stephen g cecchetti, m s mohanty and fabrizio zampolli(sept 2011), tries to examine and study the effect of debt on economic growth and also find out the level of debt at which it becomes a problem. The impact of public debt on economic growth has remained a key issue in the academia over the past decade and especially after the financial crisis in 2008, the level of public debt is expanding then the increased cost of servicing debt can impede investment (krugman, 1988) if a major chunk of foreign capital is used for.
Amounts of external debt so debt servicing does not appear to affect growth adversely but has some crowding out effects on private investment abbas(2005) finds that there was a significant positive growth payoff to debt, even at. This paper investigates the impact of the huge external debt, with its servicing requirements, on economic growth of the nigerian and south african economies. The impact of public debt upon economic growth the public debt service, but rather to the lack of political action and to the fears related to budgetary deficits in a recent study, panizza and presbitero (2012) tried to find whether public debt induces a cause. 2009) analyzed the impact of foreign debt and foreign debt servicing on the savings and investment expenditure of pakistan and suggested that foreign debt servicing has a negative impact on the constructive activities which can increase the economic growth of. The result could have given a exact picture of the impact of debt servicing on economic growth if both internal and external debt service would have been added in start we try to collect data from 1970 to 2008, but data was available from 1982 to 2008.
The impact of external debt on economic growth: a comparative study of nigeria and south africa folorunso s ayadi university of lagos felix o ayadi texas southern university abstract this paper investigates the impact of the huge external debt, with its servicing requirements, on economic growth of the nigerian and south african economies. Excessive dependency on public debt will not only hamper the current economic growth but also will affect the economy negatively in the long run, as the future generations have to bear the burden of large amount of debt servicing. The impact of debt management on the growth of the nigeria economy omoniyi, wahab shina abstract debt management is only the first step to debt sustainability and a starting point for the development of a robust debt management strategy to support future growth and development.
Growing long-term debt also has a direct, real world effect on the economic opportunities available to every american in terms of real (inflation-adjusted) income levels, cbo estimates that rising federal debt could reduce the real income for a 4-person family by as much as $16,000, on average, in 2047. Impact of external debt on economic growth in nigeria: an ardl bound testing approach audu (2004) submits that the debt service burden has continued to hamper nigeria's rapid economic development and worsened the social problems this is because debt servicing crowds out investment and growth furthermore, pattilo et al (2002) asserts that. “huge external debt does not necessarily imply a slow economic growth it is a nation’s inability to meet its debt service payments fueled by inadequate knowledge on the nature, structure and magnitude of the debt in question” (were, 2011.
The impact of external borrowing on nigeria economic growth analysis the debt service burden incurred on on nigeria economy as a result of continuous debt servicing the work aim at ascertaining whether there is both long-run and short-run relationship between economic growth and external borrowing in nigeria. The negative impact of external debt on nigeria economic growth hardly come to the mind of the policy makers at the point of contracting the loan. I) what are the effect of external debt on economic growth of nigeria ie impact of the huge, debt service payment on the various sectors and aspects of the country such as standard of living of the people.