Our Archives

Call 08068929770 for any enquiries.

Project Topic:

THE ECONOMIC IMPLICATION OF INCREASING EXTERNAL DEBT LIABILITY IN NIGERIA

Project Information:

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 63 ::   Attributes: Questionnaire, Data Analysis,Abstract
::   133 people found this useful

Project Body:

A HISTORICAL PERSPECTIVE OF NIGERIA’S EXTERNAL DEBT

The management of Nigeria’s external debt has been a major macroeconomic problem especially since the early 1980s. For many years now, the country’s debt has been growing in spite of the efforts being made by the Government to manage and minimize its crushing effects on the nation’s economy. Such efforts range from the various refinancing and restructuring agreements to debt conversion programme and the deliberate allocation of substantial resources towards servicing the debt. Of particular concern to the authorities, is the heavy debt burden it imposes when compared with the country’s debt service capacity (Ogunlana, 2005).

 Prior to 1978, the level of Nigeria’s external debt was very low, standing at about $3.1 billion and represented barely 6.2 percent of GDP. However, by 1977/1978 when Nigeria experienced a temporary decline in oil receipts, the first Jumbo loan of $1.0 billion was raised from the International Capital Market (ICM) with grace and repayment periods of three and eight years, respectively, and a relatively high rate of interest, (LIBOR + 1.0 percent) compared with the existing debts that were largely from the multilateral and concessional sources with long maturity period and other more generous terms of repayment. At the peak in mid – 1989, LIBOR was 13.0 per cent. That loan was followed by the second Jumbo loan of $750 million in 1978/1979.

 Between 1979/1980, there was an up-turn in the global oil market which improved Nigeria’s foreign exchange inflow. The relaxation of economic policy measures and the adoption of deflationary measures prompted massive importation of goods and services which brought about rapid depletion of reserves. Shortly thereafter, the global oil market witnessed serious glut which brought down the price of crude oil with the attendant devastating impact on the Nigerian economy.

 The thinking that the oil glut would be short-lived prompted both the states and the Federal Government to engage in external borrowing. They flagrantly breached Decree 30 of 1978 which fixed the limit of external borrowing at N5.0 billion US ($8.3 billion) and embarked on imprudent and massive external borrowing from the ICM to finance all sorts of projects. Moreover, the massive importation which prevailed and the indiscriminate issuance of import license with total disregard to the level of reserves and capacity to pay, resulted in massive build up of trade arrears for both insured and uninsured trade credits (Ogunlana, 2005).

 Indeed, the reality and the magnitude of Nigeria’s debt problem did not dawn on the country until 1982 when creditors refused to open new lines of credit. This led the country to seek relief in the form of refinancing of the trade arrears. The first of such exercise was in 1983 covering outstanding letters of credit as at 13th July, 1983 for $2.1 billion. By 1988, the terms of Promissory Notes issued for trade credits were renegotiated and the total value of notes issued aggregated to $4.8 billion.

 Consequently the level of external debt rose rapidly from $9.0 billion in 1980 to $17.8 billion and $25.6 billion in 1983 and 1986 respectively. The level of debt had since risen to $35.9 billion by the end of 2004 despite all the repayments, deliberate policy of drastic curtailing of further external borrowing and the various debt management strategies adopted, including debt conversion and buy-back.

 These developments completely altered the structure and character of Nigeria’s external debt from largely concessional sources of long maturity to short/medium with tough repayment terms. Of the total debt outstanding, the value and share of the Paris Club debt increased progressively from $5.8 billion or 33.5 per cent in 1984 to $21.7billion or 66.5 per cent and $30.8 billion or 85.8 per cent in 1995 and 2004 respectively. On the contrary, the share of multilateral debt as well as private debt (promissory notes and London Club Banks) have declined persistently over the years from a total of $11.5 billion or 66.5 per cent in 1984 to barely $5.1 billion or 14.2 per cent in 2004.

 The deliberate policy of the government to limit further borrowing, including from concessional sources, the strict compliance with the repayment terms of multilateral loans as well as the deal regarding London Club debt which almost provided total solution to such debt, accounted for the declining trend in the stock of debt owed to these sources. On the other hand, the conditions and terms of debt rescheduling with the Paris Club imposed difficult conditions which did not only make repayment difficult, and extremely tight, but made the debt owned to this source to grow rapidly over the years. Paris Club debts are official bilateral debt and export credit which were guaranteed by various Export Credit Agencies (Abrego and  Ross, 2001).

Project Department:

MORE ECONOMICS FREE UNDERGRADUATE PROJECT TOPICS AND RESEARCH MATERIALS


Get The Complete Project »

Instantly Share this Project On Social Media:

CLOSELY RELATED ECONOMICS FREE UNDERGRADUATE PROJECT TOPICS AND RESEARCH MATERIALS

IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA CHAPTER ONE

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 71 ::   Attributes: Secondary data, Data Analysis,Abstract  ::   436 engagements

CHAPTER ONE INTRODUCTION 1.1. Background of the study Government Expenditure no doubt is an important instrument for a government to control the economy of a nation. Economists have been well aware...Continue reading »

IMPACT OF MACROECONOMICS VARIABLES ON FIRMS’ PERFORMANCE IN NIGERIA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 59 ::   Attributes: Secondary data, Data Analysis, Abstract  ::   235 engagements

CHAPTER ONE INTRODUCTION 1.1. Background of the study Every company operates within the internal and external environments of business. The internal environments are within a firm such that the pre...Continue reading »

IMPLICATION OF TREASURY SINGLE ACCOUNT ON BANKING SECTOR OF NIGERIA AND THE ECONOMY AS A WHOLE

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 76 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   581 engagements

CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE STUDY Treasury Single Account is a public accounting system under which all government revenue, receipts and income and collected into one single acco...Continue reading »

TAXATION AS A TOOL FOR ECONOMIC DEVELOPMENT OF NIGERIA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 71 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   416 engagements

CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF THE STUDY Nigeria as a nation has the vision of becoming one among the world’s 20 largest economies in the year 2020; this obviously is the brain beh...Continue reading »

THE IMPACT OF COMPANY INCOME TAX REVENUE ON THE DEVELOPING ECONOMIES: THE NIGERIA EXPERIENCE

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 67 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   185 engagements

The article on this topic (impact of company income tax revenue on the developing economies) is an extract from literature review of the project material. The complete project work would be made avail...Continue reading »

THE IMPACT OF TAX ON GOVERNMENT CAPITAL EXPENDITURE AND ECONOMIC GROWTH IN NIGERIA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 65 ::   Attributes: Secondary data, Data Analysis,Abstract  ::   349 engagements

The article on this topic (impact of tax on government capital expenditure and economic growth in Nigeria) is an extract from literature review of the project material. The complete project work would...Continue reading »

What are you looking for today?

WHAT OUR CUSTOMERS ARE SAYING:

  • 1. JULIET from UNIMAID said "I THANK YOU GUYS FOR BEING HONEST.....I WILL TELL MY FRIENDS ABOUT YOU GUYS. THANKX SO MUCH".
    Rating: Excellent
  • 2. Lilian Terdoo from BSU said "i have nothing to say but thanx for being honest. i appreciate u guys...".
    Rating: Very Good
  • 3. Demien Johnson from UNN said "Uniprojectmaterials is a blessing to researchers. my job was eased up by you guys. your jobs have good quality and was delivered on time to me. Thanks a million times".
    Rating: Very Good
  • 4. Patience from unilag said "i was having difficulties handling my dissertation of 12000 words. until i stumbled on uniprojectmaterials, my work was ready in three days with high quality write up and excellent data analysis, i will tell all my friends about u guys. Mr Donald is a very nice person, he should be in charge of the phone. he attended to me very well. God bless. ".
    Rating: Excellent
  • 5. James Ike from College of Education, Gindiri said "Great delivery. Una dey try wella!!!".
    Rating: Excellent
  • 6. Ogba Ideh from FUT Minna said "I had a wonderful experience using UniProjectMaterials, they delivered not only on time, but the content had good quality. I recommend UniProjectMaterials.com for any project research work.".
    Rating: Very Good

Paper Information

Format:MS word
Chapter:1-5
Pages:63
Attribute:Questionnaire, Data Analysis,Abstract
Price:₦3,000
Get The Complete Project »

Best Selling Projects

Our Archives