Nigeria is confronted with the issue of limited capital and has to resort to foreign debt in order to augment domestic savings, balance of payment deficits, and shortfall in revenue which induce. Foreign debt management and the development of nigeria economy mayowa gabriel ajaocorrespondence author department of banking and finance, faculty of management sciences, university of benin, benincity, edostate, nigeria email. The guiding rules to debt to be taken into account in debts management are, debt to gdp ratio, which global maximum ratio is 40%. An empirical time series investigation tamunonimim anipiriworima ngereboa, ph. Debt burden indicators and debt servicing capacities, nigeria. Beginning from 1978, the external debt stock began to grow astronomically, rising from us. External debt to exports 2014 2018f economic alert 23 august 2017 stress testing the impact of an export shock a devaluation in the currency is a key risk to external debt sustainability. Sustainability analysis of nigerias foreign debt profile and management strategies. Nigerias external debts are basically from multilateral agencies, paris club of creditors, london club of creditors, promissory note holders, bilateral and private sector creditors and other sources jhingan, 2004, and salawu, 2005.
Time series data on external debt stock and external debt service was used to capture external debt burden. During that period, nigeria was considered under borrowed by. The debt management office, on january 15, 2020, held an interactive session with stakeholders on public debt to present its press release january 2020 fgn bond auction oversubscribed. The debt includes money owed to private commercial banks, other governments, or international. Inadequate debt data recording system and poor information flow across agencies. The paper examines external debts management strategies in nigeria and its implications on the countrys political economy. The external debt management efforts in nigeria is said to have yield results not yet, to be desired.
The empirical results indicate that oil price, debt service and gross domestic savings play a significant role in determining external debt in nigeria. The study examined the external debt, foreign exchange and sustainable debt managementthe nigeria experience, 19802017. Assessing and managing external debt problems in nigeria. This page provides forecast and historical data, charts, statistics, news and updates for nigeria gross external debt. Gross external debt for nigeria from the world bank for the quarterly external debt statistics release. The debt management office dmo nigeria is a government agency established to centrally coordinate the management of nigerias debt. The external debt of subsaharan africa origins, magnitude, and implications for action illtern itional moltary r twtn kathie l. Nigerian debt relief center for global development. Pdf foreign debt management and the development of nigeria. The full text is also available in pdf format 288k pdf. Foreign debt management and the development of nigeria economy mayowa gabriel ajaocorrespondence author department of banking and finance, faculty of management sciences. The impact of nigerias external debt on economic development article pdf available in international journal of emerging markets 33. External borrowing by creditor category as a percentage of total external debt. Search, browse and map more than 10,000 projects from 1947 to the present.
The results of the econometric analysis confirm the existence of the debt laffer curve and the nonlinear effects of external debt on growth in nigeria. The nexus between external debt and economic growth in nigeria 1981 2009. External loan or foreign debt is the total debt which the residents of a country owe to foreign creditors. The political economy of external debt management in nigeria. D department of banking and finance faculty of management sciences ekiti state university ado ekiti, nigeria oke, michael ojo. Sovereign debt management is the process of establishing and executing a strategy for managing the governments debt in order to raise the required amount of funding, achieve its risk and cost objectives, and to meet any other sovereign debt management goals the. From the late 1970s because of poor macro economic management and declining prices of crude oil, the countrys external debt began its upward movement. The necessity for governments to borrow in order to finance deficit budgets has led to the development of external debt. It uses this dataset to describe recent trends in the composition of public debt in developing countries and discusses the reasons for these trends. D department of banking and finance faculty of management sciences ekiti state university ado.
According to the debt management office2004, this debt level was considered minimal up until 1978, when the first loan. Ajayi and oke 2012 investigation of the effect of external debt burden on economic growth and development of nigeria using regression analysis of ols showed that external debt burden had an. Nigerias external debt, including its size, structure, source, type, and composition the work analyzes the indexes for measuring the debt burden and examines alternative debt scenarios. The percentages of the foreign debt variations for the various years are presented in the graph below to show the trend. Sustainability analysis of nigerias foreign debt profile and.
On the determinants of external debt in nigeria by ibrahim adamu. The effects of external debt management on sustainable. The paper also identifies possible challenges and opportunities arising from the new debt management strategy adopted by. Pdf the political economy of external debt management in. Very importantly we analyse several aspects pertaining to the management of government domestic. Debt management activities should be audited annually by external auditors. Sovereign debt management is the process of establishing and executing a strategy for managing the governments. Nigeria recorded a government debt equivalent to 17. On the determinants of external debt in nigeria by ibrahim.
The study concludes that if debt financed budget deficits are operated in order to stabilize the debt ratio at the optimum sustainable level debt overhang problems would be avoided and the benefits of external borrowing would be maximized. External debt to exports 2014 2018f economic alert 23 august 2017 stress testing the impact of an export shock a. This research work was aimed at ascertaining the impact of external debt on economic growth in nigeria. Nigeria in a complex web of debt crisis that the country found very difficult to wriggle itself out and transited into the new millennium. The nexus between external debt and economic growth in nigeria. Nigerias rising public debt continues to be a cause for concern. Expost facto research design was adopted for the study. This page provides the latest reported value for nigeria government debt to gdp plus previous releases. Nigerias external debt outstanding, end of year 37 17. Trends of external reserve and public debt of nigeria.
Nigeria government debt to gdp 19902018 data 20192020. External debt is defined as the total debt a country owes to foreign creditors. D department of banking and finance, faculty of management sciences, rivers state university of science and technology, p. Efficient debt management strategy should result in debt service ratio between 2025% of gdp omoruyi, 1996.
Foreign debt management and the development of nigeria economy. The study postulates that external debt does not contribute to the economic growth of nigeria. Debt management office, nigeria at the 8th meeting of the comecc financial working group, holding in ankara, turkey march 30, 2017 debt management office nigeria. Nigerias rising public debt continues to be a cause for. Domestic and external public debt in developing countries ugo panizza no. The portion of a countrys debt that was borrowed from foreign lenders including commercial banks, governments or international financial institutions. The external debt of subsaharan africa origins, magnitude, and implications for action. The results indicate positive correlation coefficients of 0. In the light of this, this study assesses the impact of public debt on external reserve in nigeria. The main objective of the study is to examine the effect of external debt and foreign exchange on sustainable debt management.
External debts debt management office nigeria debt management office nigeria. Pdf the impact of debt management on the economic growth of. According to debt management office, nigerias external loan dates back before. The debt includes money owed to private commercial banks, foreign governments, or. Pdf on sep 1, 2015, abdulrazak yuguda madu and others published the political economy of external debt management in nigeria. Background prior to the establishment of the dmo in 2000, the challenges of public debt management included. Home topics business administration and management project topics pdf effect of debt management in nigeria from 1960 to 2005. The management of nigerias external debt has been a major macroeconomic problem especially since the early 1980s. Pdf 2mb cited by this document is designed primarily for government officials, responsible for managing the external debt of their countries, but it should also be helpful to those with a general. The debtors can be the government, corporations or citizens of that nation. Nigerias external debt, including its size, structure, source, type, and composition the work. The study set out to test for both a long run and causal relationship between external debt and economic growth in nigeria. This study examines how the use of budget deficits as an instrument of stabilization. In theearly periods of 1980s, debt and its management, causes and consequences were hardly subjects of immense national concern.
The study examined the external debt, foreign exchange and sustainable debt management the nigeria experience, 19802017. The impact of debt management on the economic growth of nigeria. Africa, nigeria s external debt stock follows an upward pattern over the years while the former is relatively stabilized ayad and ayadi, 2008. The strategy covers federal and state governments external debts, and federal. The debtors can be the government, corporations or citizens of that country. Nigerias external debt outstanding percentage distribution 38 18. This study investigates the effect of the external debt burden on economic. During that period, nigeria was considered under borrowed by the international financial community and most creditors were eager and willing to lend to nigeria. External debts debt management office nigeria debt. Impact of external debt on economic growth in nigeria. Guidelines for public debt management international monetary fund. The study investigated the impact of external debt on economic growth in nigeria for the period 19802012. Nigeria is confronted with the issue of limited capital and has to resort to foreign debt in order to augment domestic savings, balance of payment deficits, and shortfall in revenue which induce continuous raise in the debt stock at an alarming rate. The author is grateful to heiner flassbeck, barry herman, shari spiegel, monica.
Foreign debt management and the development of nigeria. Pdf the impact of nigerias external debt on economic. The nexus between external debt and economic growth in. It adopted descriptive research and the content analysis approach. Strengthened macroeconomic and public resource management and substantial debt reduction through the heavily indebted poor countries hipcs and. The presented 20162018 debt management strategy hereinafter. Domestic government debt structure, risk characteristics. This page provides nigeria external debt actual values, historical data, forecast, chart, statistics, economic. Each chapter has references to articles, books and technical papers. This page provides forecast and historical data, charts, statistics, news and updates for nigeria gross.
External debt management, external debt management policy. The empirical results indicate that oil price, debt. External capital is significant in indias development process. Pdf the impact of debt management on the economic growth.
Ogunlana1 introduction the management of nigerias external debt has been a major macroeconomic problem especially since the early 1980s. D department of banking and finance faculty of management sciences ekiti state university ado ekiti, nigeria abstract. Information was generated extensively from literature, the nigeria central bank and national bureau of statistic reports. Nigeria, home to one in five africans, has been the continents most indebted nation. The effects of external debt management on sustainable economic. Nigeria public external debt 20082019 data 20202022.
Nigerias external debt profile nigerias external debt can be traced back to the pre independence period 1958 when about 28 million us dollars was borrowed from world bank for construction of railways. For many years now, the countrys debt has been growing in spite of the efforts being. The main objective of the study is to examine the effect of external debt and. On the determinants of external debt in nigeria papers in the ssrn. Expansionary policy during the first marcos administration, coupled with heavy external borrowing on short term, led to the crisis. This paper investigates the determinants of external debt in nigeria from 1970 through 20 using autoregressive distributed lag ardl approach. The document contains a glossary of key terms and a bibliography of major books on debt management.
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