External Debt Profile and Behaviour of Some Selected Macroeconomic Aggregates in Nigeria: An Autoregressive Distributed Lag (ARDL) Approach
- Post by: airjournals
- October 28, 2022
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ABSTRACT
This study focused on external debt profile and behaviour of some selected macroeconomic aggregates in Nigeria. The study covered from 1986-2021 and used annual time series data extracted from Central Bank of Nigeria (CBN) statistical bulletin (2021 edition). Research design adopted was ex-post facto design, while analytical techniques employed were descriptive statistics and Autoregressive Distributed Lag (ARDL) regression mechanism. The choice of the ARDL was premised on the data behaviour from diagnostic inspection: stationarity (unit root) test and Jarque-Bera test of normality. Finding revealed that the incessant rise in Nigeria’s debt profile had significantly dealt with the macroeconomic performance of the country. Particularly, the result uncovered that gross domestic product responds negatively but significantly to external debt burden in Nigeria, exchange rate responds positively and significantly to external debt burden in Nigeria; while the response of inflation rate to external debt situation was positive but statistically insignificant for the period of study. Based on these findings, the researcher advised that federal Government of Nigeria should approach external borrowing with caution, ensuring optimal utilization and as well, considering the macroeconomic effects so as to save the country’s economy from slumping. There is also the need for the country to broaden her capital investment horizon and curtail the use of borrowed funds in financing budget deficit. However, the federal Government of Nigeria should ensure that loans are utilized for purposes which they were acquired so as to enhance economic performance of the country.
Keywords: External Debt Profile; Macroeconomic Aggregates; Autoregressive Distributed Lag (ARDL); Gross Domestic Product
BY
Aniekwe, Emmanuel Onuegbunam PhD