Abstract
Nigeria’s external debt, including its size, structure, source, type, and composition.
The work analyzes the indexes for measuring the debt burden and examines
alternative debt scenarios. It distinguishes between the internal and external factors
influencing external debt accumulation, identifies the changes in the international
environment necessary to alleviate the debt burden, and examines the relationship
between export performance and the debt burden.
After reviewing the structure of
the Nigerian economy and its political history, the work concludes that Nigeria’s
debt crisis is the result of structural defects inherent in the economy since
independence. The work finds that the indicators of the debt burden have been
relatively high. The behavior of these indicators, under varying assumptions, is
explored using a growth-cum-debt model. The external and internal causes of debt
accumulation are tested econometrically, and the results show the most important
variables to be the real effective exchange rate and the terms of trade. The work
ends with some policy prescriptions for dealing with the debt crisis.
