Impact Of Debt Management On Nigeria’s Economy In The Face Of Dwindling Oil Revenue

Abstract

Nigeria is endowed with huge oil and other mineral deposits still suffer under the crushing weight of debt overhang, which means that the country currently has a huge debt that constitutes a significant proportion of the gross domestic product (GDP), and this has posed a serious challenge. Nigeria over the years has managed to service the foreign debts and even got debt relieve in 2005. However, the plunged of oil price in the international market to a record low, has affected Nigeria’s ability to pay off or service the remaining portion of the debt and rather has resulted in excessive borrowing by governments both at the federal and state levels. The paper examined the federal government effort in managing Nigeria’s debt within the reality of dwindling oil price and failure to attract foreign investment to stimulate economic growth and development. Anchoring our analysis on the dependency paradigm, and data drawn from documentary sources, with a qualitative descriptive method of analysis, findings amongst others revealed that the crash of oil price in the international market plunged the Nigerian economy into recession and affected her ability to manage her debt burden due to corruption among public officials, and the fact that the country is highly dependent on oil revenue to service her debt and finance other projects. The paper recommends that there is need for Nigeria to seriously diversify her economy and institute and encourage the culture of honesty; accountability and transparency in governance to ensure that she pay-off her debt and improve her economy.