Debt And Economic Development In Nigeria

Abstract

Countries, particularly developing ones embark on programmes that promote economic development. In line with economic development theories, such countries borrow to do this when they do not have enough savings to match the level of desired investment. This has led to serious debt burden problems that are feared to impact negatively on economic development. This problem is investigated in Nigeria and while internal debts were found to have significant impact on economic development, external debts had a negative impact. It is therefore recommended that the country should rely more on internal loans and borrow externally, when necessary only for real productive projects.

Keywords: Debts, Economic Development, Debt Overhang, Crowding out effects

JORIND Vol. 5 (2) 2007: pp. 6-6