Public external debt and exchange rate dynamics in nigeria 1996-2014


  • Department: Economics
  • Project ID: ECO0724
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ABSTRACT


The study investigated the impact of external debt on exchange rate dynamic in Nigeria for the period 1996-2014. Time series data on external debt stock and external debt service was used to capture external debt burden. The study set out to test for both a long run and causal relationship between external debt and exchange rate dynamic in Nigeria. An empirical investigation was conducted using time series data on Real Gross Domestic Product, External Debt Stock, External Debt Payments and Exchange Rate from 1996-2014. The techniques of Estimation employed in the study include Augmented Dickey Fuller (ADF) test, Johansen Co-integration, Vector Error Correction Mechanism and Granger Causality Test. The results show an insignificant long run relationship and a bi-directional relationship between external debt and exchange rate dynamic in Nigeria. The study therefore, recommends that external debts should be contracted solely for economic reasons and not for social or political reasons. This is to avoid accumulation of external debt stock overtime and prevent an obscuring of the motive behind external debt. Similarly, the authorities responsible for managing Nigeria’s external debt should adequately keep track of the debt payment obligations and the debt should not be allowed to pass a maximum limit so as to avoid debt overhang.




 



TABLE OF CONTENTS



Abstract



 CHAPTER ONE



INTRODUCTION



mso-fareast-font-family:"Times New Roman"">1.1              Background to the study



1.2       Statement of the problem



    1.3        Objectives of the study



"Times New Roman"">1.4              bold"> Research questions



1.5        Research hypothesis



1.6        Research methodology



1.7        Significance of the study



1.8         Scope of the study



1.9         Plan of the study



mso-bidi-font-weight:bold"> 



CHAPTER TWO



LITERATURE REVIEW



mso-bidi-font-weight:bold"> 



2.1 Conceptual framework



            2.1.1 the concept of external debt



            2.1.2 the concept of exchange rates



2.2 theoretical frameworks



mso-fareast-font-family:"Times New Roman";mso-bidi-font-weight:bold">2.3.1        bold">Review of external debt theory



mso-fareast-font-family:"Times New Roman"">2.3.2        bold">the dual-gap theory



mso-fareast-font-family:"Times New Roman"">2.3.3        bold">external debt and economic growth



            mso-bidi-font-weight:bold">2.3.2    Review of external debt theory



            2.3.3    Exchange rate determination models



            2.3.4    Flexible price monetary model



 



            2.3.5 sticky-price monetary model



            2.3.6 Equilibrium model and liquidity model



            2.3.7 Portfolio balance model



 



2.4       Origin of Debt Crisis in LDCs



            2.4.1 Why countries borrow



            2.4.2 Origin of Nigeria’s external debt



            2.4.3 Causative factors of Nigeria’s external debt



            2.4.4 Nigeria’s external debt profile



2.5       External debt management in Nigeria



            2.5.1 External debt management strategies.



            2.5.2 Nigeria external debt servicing



 



            2.5.3 Nigerian external debt rescheduling and restructuring



2.6       Literatures on External Debt Management of Nigeria



 



2.7       An Overview of Exchange Rate Regimes



            2.7.1    The gold standard regime



            2.7.2    Flexible exchange rate regime



            2.7.3     The crawling peg regime



            2.7.4      The managed float regime



            2.7.4     the European monetary system



mso-fareast-font-family:"Times New Roman"">2.8              An evaluation of exchange rate regimes in Nigeria 



            2.8.1 Exchange rate determinants



mso-fareast-font-family:"Times New Roman"">2.9              Empirical Literature



            2.9.1    Nigerian studies



 



CHAPTER THREE



 



THEORETICAL FRAMEWORK & RESEARCH METHODOLOGY



 



 



bold">3.1 Introduction



 



bold">3.2 Theoretical Framework



 



bold">3.3 research methodology



 



bold">            3.3.1 Model specification



 



 



bold">3.3.2 Techniques of estimation



 



bold">3.4 data sources, definitions and measurements



 



bold">            3.4.1 Data sources



 



bold">            3.4.2 Data definitions



 



 



 



CHAPTER FOUR



DATA ANALYSIS & INTERPRETATION



 



bold"> 



mso-bidi-font-weight:bold">4.1 Introductions



mso-bidi-font-weight:bold">4.2 Descriptive Analysis



bold">4.3 Trend Analysis



 



bold">4.4 Econometric Analysis



 



mso-bidi-font-weight:bold">            4.4.1 Unit root test



mso-bidi-font-weight:bold">            4.4.2 Johansen co-integration test



mso-bidi-font-weight:bold">            4.4.3 Error correction estimates using vector error correction model



mso-bidi-font-weight:bold">            4.4.4 Granger causality test



 



bold">4.5 Conclusion



 



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  • Department: Economics
  • Project ID: ECO0724
  • Access Fee: ₦5,000
  • Pages: 95 Pages
  • Reference: YES
  • Format: Microsoft Word
  • Views: 1,076
Get this Project Materials
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