External Debt Burdens and Economic Growth: A Vector Error Correction Approach from Nigeria

This study examined the effect of external debt burden on growth Nigeria economy. Time series data was sourced from Central Bank Statistical Bulletin 1986-2019. real gross domestic proxied for dependent variable while servicing; stock, overhang, sustainability and crowd-out were proxies independent variables. The employed multiple regression models to estimate relationship that exists between indicators economic growth. Ordinary Least Square (OLS), Augmented Dickey Fuller Test, Johansen Co-integration test, normalized co-integrating equations, parsimonious vector error correction model pairwise causality tests used conduct investigations analysis. findings revealed 72 percent variations in products can be explained by changes indicators. results indicated a negative coefficient with stock overhang positive sustainability, servicing crowd out products. From findings, concludes burdens significantly affect We recommend fund borrowed should effectively managed, federal government laydown guidelines terms defining purpose, duration, moratorium requirements commitments, negotiation among others including conditions loans. Government initiate develop policies will address fundamental causes debt.