External Debt and Economic Performance in Nigeria: An ARDL Approach.

ABSTRACT

This study investigate the external debts on economic growth, employment and inflation in Nigeria. The objective of this study is to: empirically examine the impact of External Debt on Economic performance in Nigeria; examine the impact of external debt on employment in Nigeria; and finally investigate the impact of the external debt on inflation in Nigeria. On the bases of the objectives of the study, the research findings show that external debt do not significantly influence economic growth, however, it does impact significantly on employment and inflation rate. In specific 48 terms, the external debt stock has a positive and insignificant relationship with growth rate of real gross domestic product in the first model, positive and significant impact on unemployment rate in the second model, and finally a positive and significant impact on inflation rate in Nigeria. On the basis of the a priori expectation and based on the objectives of this study, the coefficients of external debt conformed to a priori expectation in the first model while it didn’t conformed to a priori expectation in the second and third models.