ABSTRACT

The study examines The Effect of External Debt and Balance of Payment on Economic Growth in Nigeria. This study covers a time span of 35 years (1980-2014). The analytical technique used in this study is multiple regression and the data is secondary and sourced from Central Bank of Nigeria (CBN) publications such as CBN statistical bulletin, CBN annual report as well as economic review documents. The results were obtained using Eview version 8.0 and the major findings is that External Debt has a negative significant effect on economic growth in Nigeria and Balance of payment does not have statistical significant effect on economic growth of Nigeria within the period under review. The study thus recommended that; External debts should be contracted solely for economic reasons and not for social or political reasons to avoid accumulation of external debt stock overtime and Debt Management Office (DMO) should set mechanisms in motion to ensure that loans are utilized for the purpose for which they were acquired among others, to ensure Nigeria in the long run aside having a favourable balance of payment would attain the status of an industrialized Nation at the barest debt.