Debt Recovery Research Papers - Academia.edu (original) (raw)
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The rationale for this Research work is to establish the relationship between economic growth, external debt and internal debt in Nigeria. Debt has become inevitable phenomenon in Nigeria, despite its oil wealth. This paper therefore is... more
The rationale for this Research work is to establish the relationship between economic growth, external debt and internal debt in Nigeria. Debt has become inevitable phenomenon in Nigeria, despite its oil wealth. This paper therefore is set to investigate the empirical analysis of the impact of external debt and internal debt on economic growth in Nigeria between 1986-2013 through the application of Ordinary least square method to establish a simple relationship between the variables under study, Granger causality test of causation between GDP, external debt and domestic debt, chow break point. the results of Causality test suggest that there is a bi-directional causation between external debt and GDP while no causation existed between domestic debt and GDP as well no causation existed between external debt and domestic debt. Also the chow break point test revealed that there are no breaks at specified breakpoints in the variables. The results of OLS also revealed that external debt possessed a negative impact on economic growth while internal debt has impacted positively on economic growth (GDP). A major policy implication of this result is that concerted effort be made by policy makers to manage the debt effectively by channelling them to productive activities (real sector) so as to increase the level of output in Nigeria, hence achieving the desire level of growth.