EXCHANGE RATE, EXTERNAL DEBT BURDEN AND ECONOMIC GROWTH IN NIGERIA
Keywords:
Exchange Rate, Economic Growth, External Debt, Burden and ARDLAbstract
The introduction of the Structural Adjustment Programme in Nigeria in 1986 was a pivotal moment that contributed to the country's excessive reliance on foreign debt to bridge the gap between savings and investment. Given that this obvious problem emanated from the humongous accumulation of debt and the likely effect of the exchange rate on it, this study examined exchange rate and the relationship between external debt burden and economic growth in Nigeria. To achieve this, the study employed the Autoregressive Distributive Lag Model (ARDL) for its analysis. The result indicated that interacting exchange rate with the external debt burden (ratio
of external debt burden to oil revenue) hurts the economic growth of the country. Hence, it was suggested as a way forward the need for the government to fully diversify the economy from the oil sector to the non-oil sector through policy implementation so that the country's economy can gain extensively from the revenue generation in the non-oil sector.
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