Nigeria’s External Debt: The Perceived Pros and Cons

Abstract

A vast majority of countries exist that are unable to self-finance themselves in terms of infrastructure, education, social amenities, and other major projects. As such, they embark on a debt-creating act. With low tax revenues, the government does not want to jeopardize macroeconomic stability by printing additional money. Hence, borrowing is an appealing option for funding infrastructure development projects. Public borrowing happens in both domestic and international markets. External debt is the debt due to non-residents that are repayable in foreign money, food, or services. Nigeria's external debt is on the increase and it is of great concern. This mini review seeks to highlight the impact of external debt on Nigeria. With the right policies, laws, government apparatus, and lack of corruption, External debt can be a great tool in achieving economic growth.