The impact of external debt reduction on economic growth in Nigeria: some simulation results

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Periodical article

Title:	The impact of external debt reduction on economic growth in Nigeria: some simulation results
Author:	Iyoha, Milton A.
Year:	2000
Periodical:	The Nigerian Journal of Economic and Social Studies
Volume:	42
Issue:	2
Pages:	235-262
Language:	English
Geographic term:	Nigeria
Subjects:	external debt economic development
Abstract:	This paper presents an empirical study of the validity of the debt overhang theory as it relates to Nigeria. The study simulates the impact of debt stock reduction packages on investments and economic growth in Nigeria. The analysis uses two models, the two-gap model and a model of the effect of debt and debt servicing on economic growth. Reasons why the debt burden seems insoluble are given and reference is made to the various methods suggested for solving the problem, including debt rescheduling. The paper concludes that the debt overhang theory is valid for Nigeria where the heavy external debt stock and debt service payments have had a crowding out effect, reducing investment and inhibiting economic growth. Bibliogr., notes, ref., sum. [Journal abstract]