External Debt and Sustainable Development: Empirical Evidence from Nigeria

Abstract

This paper studied the association between external debt and sustainable development in Nigeria to ascertain empirically the extent of relationship between external borrowings and achieving Sustainable Development Goals (SDG) 2 – Zero Hunger and SDG 3 – Good Health and Well Being. Secondary data for the period 2003 to 2019 were extracted from publications of Debt Management Office (DMO) of Nigeria, National Bureau of Statistics, International Monetary Fund (IMF) and the World Bank. The study formulated two hypotheses and tested them using Spearman’s Rank Correlation tool. The results revealed that there is no significant relationship between external debts and sustainable development in Nigeria. The paper argues that the accumulated external debts in Nigeria are not properly utilized for sustainable developmental projects that reduce the high poverty index and low life expectancy of its populace. It therefore recommends adoption of debt management strategies targeted at gradual liquidation of Nigeria’s external debt stock to avoid debt overhang. This should be done through reduction in excessive government spending especially expenditures on non-productive sectors of the economy. Hence, judicious utilization of funds on sustainable projects that reduce poverty level and improve life expectancy should be carried out in order for Nigeria to join other United Nations(UN) member countries on achieving the 17 SDGs by the year 2030.