External Debt and Nigeria’s Economic Growth Nexus, Matters Arising
Journal Title: International Journal of Financial Economics - Year 2013, Vol 1, Issue 2
Abstract
This study focuses on the impact of external debt on economic growth of Nigeria and in order to carry out an empirical analysis a Simple Regression analysis of the least square method of parameter estimator was done. The significance of the estimated parameters was also subjected to tests like Analysis of Variance, Student t- test, Correlation coefficient (R) and Coefficient of determination R2. The empirical results via the parameters’ estimates revealed that external debt and debt service have negative and positive influence respectively, though the external debt’s estimate was not too strong, on economic growth. The empirical Student t-test and F-statistic when compared with theoretical table values at both 1% & 5% significance level, suggests the acceptance of Null hypothesis stated for equation I which confirms the validity of the negative impact of external debt on economic growth of Nigeria and the acceptance of Alternative hypothesis for equation II which confirms the positive significant relationship between economic growth and debt service. However, the R2 of 53% and 64% reveal that the equations of the models were well fitted that is the independent variable was adequately explained by the explanatory variables. In view of the negative contribution of external debt to economic growth, it is recommended among others, that cost-benefit analysis, prioritization of projects, absorptive capacity of the economy, investment on productive self-financing projects, probity as well as accountability in handling government resources and debt sustainability should form the basis for contracting external debt finance.
Authors and Affiliations
Olalekan Emmanuel Obademi, Olawale. O. Okubanjo
Keywords
Related Articles
- EP ID EP27242
- DOI -
- Views 396
- Downloads 12
On Asset Allocation’ Studies for Sovereign Wealth Funds
The objective of this work is to analyze, after a review of the economic literature reference, the role of Sovereign Wealth Funds in the economy and in particular in asset allocation choices. In fact, after presenting...
Empirical Analysis of Financial Sector Development and National Savings: Evidence from Nigeria Economy
This paper set out to examine whether there is a dynamic long run relationship between financial sector development and Nigeria National Savings in addiction to determining the direction of causality among the variable...
Do the Spot and Futures Markets for Commodities in India Move Together?
The objective of this paper is to study the relationship between spot and futures prices of commodities in the Indian commodity market. Few agricultural and non-agricultural commodities have been involved in analyzing...
Oil Price and Nigeria Balance of Payment: A Causality Analysis
This research empirically investigated oil price and balance of payment in Nigeria with quarterly secondary time series data over the period 1980:1 to 2015:4 obtained from the Central Bank of Nigeria (CBN) statistical...
The Stigma of Unemployment: Are Unemployed People Seen As Less Productive? A Survey of Employers in Sunyani, Ghana
The objective of the paper is to explore the nature of sigma of unemployment and its effect on hiring in organisation from the perspective of employers in order to contribute to the body of knowledge that exist in the...