For The effect of external debt on a nation’s economy has been a subject of controversy among academics. Were (2001) investigated the impact of Kenya‟s external debt on its‟ economic growth and found that economic growth was negatively affected by high external debt. Their result shows that external debt is negatively and significantly related to economic growth. The … /BitsPerComponent 8 %���� External debt impact on the developing economies has been a much-debated issue. Thus, an economy grows much faster without public debt than with debt. �� � } !1AQa"q2���#B��R��$3br� (�� This kind of anal-ysis has not been carried out before. This information is gathered from approximately 23,000 businesses and 50,000 landlords or renters around the nation to calculate a … government debt External debt can be described as the situation where governments face budget deficit due to the hig… In pictures: Behind the scenes of Fawad, Mahira-starrer 'Neelofar', Dar’s TV interview and importance of merit. %&'()*456789:CDEFGHIJSTUVWXYZcdefghijstuvwxyz��������������������������������������������������������������������������� Our data allow us to look at the impact of household, non-financial corporate and government debt separately.1 Using variation across countries and over time, we examine the impact of the movement in debt on growth.2 Our results support the view that, beyond a certain level, debt is bad for growth. In addition, high levels of debt would affect many other aspects of the economy in the future. The analysis specifically sought to: examine the effect of internal and external debt on economic growth in Nigeria and (ii) to evaluate the overall goodness of fit of the model in explaining variations in economic growth. External debt become a problem when it is not properly managed. (�� the table bellow can show us two Null Hypothesis first one external debt does not grander cause GDP and the second one is GDP does not grander cause External Debt. $4�%�&'()*56789:CDEFGHIJSTUVWXYZcdefghijstuvwxyz�������������������������������������������������������������������������� ? /Width 346 KEYWORD: Domestic debt, external debt, debt structure and economic performance. The aim of this study was to estimate the effect of external public debt on economic growth in four East African countries. The paper titled “External Debt, Public Investment, and Growth in Low-Income Countries” written by Benedict Clements, Rina Bhattacharya and Toan Quoc Nguyen focuses on how the external debt of low income countries effects their growth. The estimation results reveal that external debt negatively affects economic growth in SSA. Furthermore, Pattilo et al (2002) assert that at low levels, debt has positive effects on growth but above the threshold point accumulated debt begins to have a negative impact on growth. The effect of external debt on a nation’s economy has been a subject of controversy among academics. INTRODUCTION The question here is whether the public debt incurred by Nigeria which consists of domestic and external debts are of any consequence to the economy. (2013) found a statistically insignificant negative relationship between foreign debt and economic growth. stream Annual ti… (�� domestic debt and external debt of the respective Governments, because the composition of public debt, share of external debt, risk characteristics of public debt, etc., might play a crucial role for maintaining sustainability and stability of the economy. /ColorSpace /DeviceRGB They have also highlighted the impact of rising external debt on public investment. /Filter /DCTDecode Some were of the view that external debt accelerates economic growth (Hameed, Ashraf and Chandhary, 2008). For Going back to our $10 trillion theoretical fractional reserve system money supply we’d have this: In this example, $9 trillion in bank loans have been used to create $9 trillion in bank-account money. /Height 180 countries. Debt in itself is not bad and is a factor for accelerating economic growth. *$( %2%(,-/0/#484.7*./.�� C Because of the fact that debt is to be paid by future income, it reduces future savings. Servicing external debt (paying debt interest payments) ceteris paribus, reduces GDP because the monetary payments flow out of the country. These included Kenya, Tanzania, Uganda, and Rwanda. The evidence suggests that increase in external debt will lead to decline in economic growth. Debt service payment reduced export earnings and other resources and therefore retard growth. Adegbite, Ayadi, and Ayadi (2008) investigated the impact that Nigeria's huge external debt stock had on its economic growth between 1975 and 2005. In the case of Malawi, Tchereni et al. Consumer debt begins to negatively affect the health of the economy when it forces consumers to spend less. /Subtype /Image (�����ħ "�H�wzƗg$1\_���"�{�gf �q�9l�rKv_��* domestic debt and external debt of the respective Governments, because the composition of public debt, share of external debt, risk characteristics of public debt, etc., might play a crucial role for maintaining sustainability and stability of the economy. The study also analyzed the risk and costs associated with public debt in the countries. Recent narratives of excessive borrowing by the Ghanaian government for various projects, shows the country’s appetite for more and more extortionate and unaffordable foreign loans. External debt also cause direct burden on the community because of the raised taxes by the government to generate additional revenues for the debt servicing. 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