Foreign Debt, Institutional Quality and Infrastructural Delivery in Nigeria: An Empirical Investigation

EFEMIEMIE Vivian; UKEDJERE Stephen; EHIEDU; Victor C; PhD

doi:10.56201/wjeds.v10.no7.2025.pg66.86

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Foreign Debt, Institutional Quality and Infrastructural Delivery in Nigeria: An Empirical Investigation

EFEMIEMIE Vivian, UKEDJERE Stephen, EHIEDU, Victor C, PhD

Abstract

This study investigates the effect of foreign debt accumulation and institutional quality on infrastructural delivery in Nigeria, with a particular focus on road network density from 1995 to 2024. Recognizing the importance of historical trends in shaping current infrastructure outcomes, the study adopts an ex post facto research design, utilizing secondary time-series data sourced from the Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS), and relevant institutional reports. To rigorously examine both short-run dynamics and long-run relationships among the variables, the Autoregressive Distributed Lag (ARDL) approach was employed, allowing for the integration of variables irrespective of whether they are I(0) or I(1). The ARDL results reveal a stable long-run equilibrium relationship between Nigeria’s road network density (RND) and the selected explanatory variables. The error-correction term (CointEq(-1) = -0.8937, p = 0.0002) is negative and highly significant, indicating that deviations from long-run equilibrium are corrected by approximately 89% per period, reflecting a rapid adjustment process. In the long-run analysis, external debt stock (EDS) exerts a positive and statistically significant effect on road network density (coefficient = 0.2637, p = 0.0123), suggesting that higher levels of external debt accumulation have contributed to the expansion and improvement of road infrastructure over the study period. In contrast, debt service ratio (DSR), exchange rate (EXCHR), and inflation rate (INFR) all exhibit positive but statistically insignificant effects (p > 0.05), implying that these macro-institutional factors do not substantially influence long-term infrastructure delivery. The baseline constant (C = 17.9042, p = 0.0000) underscores the inherent infrastructure level independent of the explanatory variables. Based on these findings, the study concludes that external debt can play a pivotal role i

References

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Foreign Debt, Institutional Quality and Infrastructural Delivery in Nigeria: An Empirical Investigation

Abstract

References

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