International Financing and Economic Development in Nigeria
Abstract
This study examines the effect of international financing and economic development in Nigeria from 1983 to 2023. The study disaggregated international financing into external debt, foreign direct investment, official development assistance and remittances, while economic development was proxied by human development index. Annual time series data used were sourced from the World Development Indicators , the National Bureau of Statistics and the Central Bank of Nigeria annual Statistical Bulletin and utilised the Autoregressive Distributed Lag to estimate the short-run and long-run interactions among the variables. Empirical results revealed that external debt showed a positive but statistically insignificant impact on human development index while foreign direct investment, official development assistance and remittances have significant positive effects on human development index. The study concluded that international financing play a vital role in enhancing economic development in Nigeria. It was recommended among others that Careful management is needed to ensure borrowed funds are directed toward productive, labour-intensive projects. Policymakers should prioritise loans for sectors that directly influence employment, such as agriculture, manufacturing, and infrastructure, while avoiding unproductive or debt-heavy expenditures that do not create jobs.
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