The Effect of Foreign Debt on the Nigerian Economy

Abstract

This study evaluated the effect of foreign debt on the Nigerian economy. Ex-post facto research design was adopted for the study and secondary data were used. A regression model was adopted for the analysis. The population of the study was three hundred and fifty staff of the debt management office Abuja. The sample size for the study was one hundred and fifty respondents that were selected scientifically from various departments of the debt management office. The study revealed that foreign debt has a positive and significant effect on the Nigerian economy. The study concluded that foreign debt is an important factor for the economic growth of developing nations like Nigeria if well managed. It was recommended that financial experts, policy makers, and Central Bank of Nigeria (CBN) should integrate suitable as well as appropriate measures towards ensuring effective management of foreign debt in order to enhance gross domestic product as well as the economic growth and development of Nigeria. That the Nigerian government should put in place more management techniques and restriction on access to external or foreign debt as most of the external debt cannot be accounted for in the infrastructural projects claimed by successive administrations and that external debts should be directed towards encouraging real investment so as to increase capital formation and achieve sustainable economic growth and development in the country.