“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. External debt is a vital source of public financing in developing countries and carries the potential to play a key role in promoting economic growth.
Keywords: domestic debt, external debt, economic growth the impact of government debt on the economic growth of ghana: a time series analysis from 1990-2015 1 introduction research leap is an international journal hosting platform for business research, management and innovation research leap is where business practice meets research. Their result shows that external debt is negatively and significantly related to economic growth the evidence suggests that increase in external debt will lead to decline in economic growth hameed et al (2008) on pakistan analyzed the long run and short run relationships between external debt and economic growth. The impact of external debt on economic growth: a comparative study of nigeria and south africa article (pdf available) january 2008 with 5,495 reads cite this publication.
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 loan or borrowing to fund gaps in government revenue has become norm in sub-sahara africa especially in nigeria. The impact of external debt on economic growth is a debatable issue between scholars since the onset of the debt crisis in 1980’s this thesis examines.
The proponents that external debt has negative impact on the economy stem from the fact that at certain level, debt accumulation becomes a burden and will no longer stimulate the economic growth (elbadawi, ndulu and ndungu, 1996. The impact of external debt on economic growth in nigeria by abubakar sadiq saleh department of banking and finance, university of abuja. The negative impact of external debt on nigeria economic growth hardly come to the mind of the policy makers,, causes and solution to external debt problems. The external debt exerts significant negative impact on economic growth this confirmed the existence of debt overhang in pakistan in both long and short run labour force affect gnp negatively in long run and short run as well, but in short run impact is insignificant. Empirically analyse the impact of external debt on economic growth rate (as measured by gdp growth rate) of nigeria the remaining part of the study is organized as follows: section two provides a synthesis on theoretical and empirical literature on external debt and economic growth section three discusses the source and.
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. It is recommended that for external debt to be of positive impact on growth there is the need for a comprehensive and effective debt management strategy 11 introduction foreign debt is a situation of the indebtedness of one country to another or institutions of the world.
Which external debt impacts economic growth in low-income countries they estimate a reduced form growth equation for 55 low-income countries from 1970 to 1999, using both fixed effects and system generalised method of moments like their colleagues at the imf, pattillo et al (2002), clements et al. External debt is a vital source of public financing in developing countries and carries the potential to play a key role in promoting economic growth traditional literature regarding economic.
External debt is a major source of public receipts and financing capital accumulation in any economy (adepoju et al , 2007) it is a medium used by countries to bridge their. 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.