DEBT MANAGEMENT STRATEGIES FOR RAPID ECONOMIC DEVELOPMENT IN NIGERIA (1980-2019)

Abstract

Debt management is a strategy that helps pay off lenders or otherwise better manage them. It works with lenders to restructure debt or help debtors handle payments more effectively.The aim of this study is to show empirically the impact of debt management strategies on economic growth of Nigeria. The study focused on debt management in Nigeria. The data were compiled from reports of the Central Bank of Nigeria and the National Bureau of Statistics. Surveys of information collected using illustrative measures suggest that access to external funds has a disproportionate impact on the monetary growth cycle of any country. The management of external debt is an important asset that should contribute to a sustainable monetary growth.

The purpose of this study is to examine the sustainability of debt management strategies on financial development in Nigeria from 1981 to 2019. The broad objective of this work is set to assess the impact of outstanding external debt and the modification of debt on monetary growth. Taking all things together, the model had to show the growth link between the rate of expansion of free factors, scale of conversion, cost of debt, utilization of government, stock of external debt and growth. Administration of external obligations and dependent variable (GDP). Due to this survey the Ordinary least squares (OLS) method was used. Augmented Dickey Fuller (ADF) test shows that the factors are fixed. The choice of the model for this research is in general least squares because it provides satisfactory results for estimation of structural parameters (Koutsoylanmis 1977:43). This method involves deciding whether the parameters are statistically significant and theoretically significant. It also examines the validity of estimates and whether they actually represent economic theory. To arrive at a comprehensive analysis, three main elements of external debt management: outstanding external debt, debt service payments and foreign pools were used. Real GDP was used in the regression analysis. It was found out that external debt adversely affected the growth of the Nigerian Economy. This is as a result to unchecked borrowing and mismanagement of fund. Debt management strategies are important to meet deficiency inner assets, and animate the economy. In any case, it must be appropriately used to maintain a strategic distance from genuine results.  This study has provided evidence that may be useful policy makers and financial analyst especially during the post Covid 19 recovery era. It will be of great benefit to public office holders as it will guide them to effective debt management strategy. The government should embark on a cycle of robust economic expansion. This provides a strong and robust economy and minimizes the need for external debt management. Here again, governments must equip themselves with an empowering socio-financial position that favors the industrialization of the industry, which translates into direct and unknown forecasts.