This study investigated the effect of debt financing on the Nigerian economy considering the Pre and Post debt forgiveness era of 2005. It covers the period of 1981 to 2017. Specifically, the work verified the effect of external debt financing on economic growth using GDP as a yardstick and real exchange rate as the moderating variable. The research design adopted in this work was the ex-post facto. The study employed the OLS Regression (Chow-Test) Analysis. The research findings showed that external debt finance during the Pre- 2005 debt relief (debt forgiveness era) has a significant negative influence on the growth of the Nigerian economy. While the post 2005 debt relief positively and significantly influenced economic growth in Nigeria. They concluded that debt financing has a significant negative impact on her economy before the debt forgiveness era on one hand and a positive and significant impact on her economy after the debt forgiveness era on the other hand.The researchers therefore recommended among other things that borrowed funds should not be diverted to other purposes especially to finance budget deficit and electioneering campaign.
Peters Sebastian Ogugua Okafor
Peters Sebastian Ogugua Okafor has BSc and MSc in finance, MBA in banking and finance, TTC in business education. He is also a certified public accountant with over twelve years lecturing experience. He has authored many books and intl. journals. Presently, he is a financial consultant and is also at the verge of concluding his Ph.D program.
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LAP LAMBERT Academic Publishing
external debt, Exchange Rate, Gross Domestic Product, Nigerian Economy and Structural Break
BUSINESS & ECONOMICS / Banks & Banking