THE IMPACT OF DEBT BURDEN ON ECONOMIC GROWTH OF NIGERIA (ECONOMICS PROJECT TOPICS AND MATERIALS)
1.1 OVERVIEW OF THE STUDY
The Nigeria economy as we all know is characterized by a number of socio- economic problems. These problems include: import dependence, dependence on a single economic sector, weak industrial base, a low level of agriculture production, a weak private sector, dependence on foreign loan, regional inequalities and rural- urban migration, slow growth rate, inefficiency of public inequalities, low qualities of social services, unemployment, under-developed political structures and mechanisms; poor demographic indication of high fertility, breakdown in social order etc. an analysis of these problems showed that most of them are due to the structural characteristics of the economy. In order to solve these problems and ensure a meaningful development, efforts were made by the Federal Government of Nigeria to involve herself in debt, which has resulted to a very big burden to economic growth of Nigeria.International Monetary Fund (2001) state that Nigeria economy like all other developing economic countries in the world is presently undergoing a major debt crisis. The major in its history since the country’s incorporation into the world wide crisis accumulation which is believed to have resulted in market deterioration in the aggregate balance of payment deficit. A wide gap between government revenue and expenditure, the collapse of social services and infrastructures, an escalating level of inflation, an acute storage of basic consumer goods, a decline in standard of living, without doubt it is strongly believed that there are link between the decline in global economy and that of Nigeria economy.
World Bank and IMF (April 2001) states that debt raised by the government either arose from internal sources (Domestic debts) or external sources (Foreign debts) for the execution of government programmes. When government actual revenue performance fall short of projected estimates, government resorts to borrowing to finance project that are of social and economic importance to the nation. Funds from internal sources includes: treasury bill certificates and government development stocks. While when funds are sources from external bodies like Paris club, London club, multilateral and private sectors, international banks, external debt is incurred.Debt management office (2009) says that debt is the amount of fund Nigeria is owing to the outside Countries and also within the country at any given time and these debts inhibits our economic progress and revival, weakens investment and crowd out growth. As with other third world war countries, Nigeria debt crisis is part of a wide crisis accumulation.The management of Nigeria’s debt brings about some kind of economic stabilization programmed to provide the policy framework for the servicing, refinancing and rescheduling of the country.
In the face of the country’s growing debt crisis, foreign creditors begin to insist on the articulation and implementation of austerity measure as a precondition for negotiation terms for the rescheduling, refinancing and servicing of Nigeria debt and unlocking lines of credit.They are encouraged in this by the institutions that monitors stabilization programmes in the international of economic system, the IMF and the world bank, using the various loan at their disposal and the stick of punitive, international financer boycott to impose a particular kind of adjustment package on the developing countries.