External debt/key variables in Nigeria

This study empirically examined the response of external debt to some selected macroeconomic variables in Nigeria. It covered the period of 32 years (1986-2017) and used annual time series secondary data extracted from the Central Bank of Nigeria (CBN) Statistical Bulletin, 2017 edition, and other published and unpublished materials. Research design adopted was ex-post facto research design. Using the fully modified ordinary least squares (FMOLS) multiple regression analysis technique, Augmented Dickey-Fuller (ADF) unit root test, Johansen and Juselius cointegration test, and Jarque and Bera test of goodness-of-fit (normality), it was ascertained that volume of balance of payment, high exchange and interest rates trigger external debt growth while real GDP and trade openness lower the level of external debt in Nigeria. On this background, it was recommended among other things that Nigerian government should work towards increasing her capital investment horizon internally instead of using borrowed funds to finance the key developmental indices.