APPRAISAL OF NIGERIA’S EXTERNAL DEBT MANAGEMENT
ABSTRACT
This study reflects an appraisal of Nigeria’s External Debt Management necessitated by inadequate internal capital formation arising from vicious cycle of low productivity, low income and savings in the Nigerian economy. Considerable linkage has been established between external debt and economic performance. The study determined the impact of Nigeria’s external debt stock on gross domestic product and also examined the impact of external debt penalties on arrears for default of external debt stock covering a period of 25 years, 1989-2014, using secondary data. The study used ordinary least square (OLS) estimation technique for analysis. Findings showed that external debt stock had a negative significant impact on gross domestic product. Threats associated with borrowing externally for capital formation in Nigeria outweigh the benefits therein. There was a positive significant impact of penalties arrears for default on external debt stock. An increase of external debt stock as a result of rising penalties on arrears has deepened the burden of debt and its sustainability in Nigeria. External debt by economic sector to support infrastructure should be taken into consideration, which is in accordance with the provisions of the Fiscal Responsibility Act and the National Debt Management Objectives & Strategy. Also external debt service payment should be paid ras at when due to avoid accumulation of compounding late interest on penalty payment which in the past had contributed immensely to the deteriorated debt situation in Nigeria within the period under study.