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This paper investigates the drives for increasing external debt in an open economy Nigeria over the period 1970 to 2017 using general to specific approach (GETS) approach (Hendry, 1995). The Johansen cointegration test confirms that variables have long run relationship. The empirical results for both long run and short run estimates indicate oil price, domestic savings and fiscal deficits play a significant role in increasing external debt in Nigeria. The study also found evidence that the dummy variables for exchange rate and debt relief also accelerate the growth of external. This finding indicates that, after the multilateral debt relief between 2005 and 2006, fresh loans are still coming to Nigeria. To this end, Nigeria should focus on investment in real sectors especially in agriculture and manufacturing to increase export performance. This would enable the country to generate adequate foreign earnings and stimulate domestic savings, and reduce reliance on oil revenue...

780 hits

The present paper investigates the relationship between natural resource abundance and economic growth for Nigeria covering the period 1970 to 2016. Our methodology encompasses autoregressive distributed lag (ARDL) bound test to cointegrating approach augmented by Bayer and Hanck combined cointegration test. Empirical results confirm a long run relationship among the variables under examination. More importantly, findings indicate that natural resource exerts a negative and significant impact on economic growth in both long run and short run dynamic analysis. This validates the Sachs and Warner’s hypothesis that natural resource is a curse than a blessing in Nigeria. Hence, the study stresses the needs for diversifying the non-resource based sectors to  support the economy.  ..

909 hits