Akpan H. Ekpo, Elijah Udo
(West African Institute for Financial and Economic Management (WAIFEM), Lagos, Nigeria)

 

Abstract: The paper examines the relationship between debt, growth and poverty in Nigeria for the period 1970-2011. Despite the enormous resources, Nigeria seems to accumulate external debts especially in periods of declining oil prices in order to finance the development of the economy. What has been the precise link between external debt and poverty reduction? Econometric analysis brings out the precise relationship among these variables. The econometric methodology used incorporates elements of a failing state such as corruption, ethnic violence and insecurity, among others. Furthermore, incidence of poverty is captured by examining the share of government spending on social services as well as the trend in per capita income. The results show that public debt had a negative impact on growth and poverty reduction. The results of the proxies of a failing state indices were mixed.

 

Key words: debt; economic growth; poverty; Nigeria

JEL codes: O4, O43