global-journal-of-human-social-science-e-economics Global Journal of Human-Social Science - E: Economics 0975-587X 2249-460X Global Journals Publishing Group Incorporated 61609 Implication of Fiscal Deficit Financing on External Debt Sustainability in Nigeria Impact of Fiscal Deficit on External Debt in Nigeria OlaoyeOlayide Olayinka OdumeruSunday O. NIGERIA, Ajayi Crowther University 09 02 2023 22 E7 35 43

The accumulation of debt for developmental purpose has failed to yield the desirable transformation. So, the study investigated the impact of fiscal deficit financing on external debt sustainability in Nigeria. The dual gap theory formed the basis of the study. Using annual time series data from 1981 to 2020 and the Autoregressive distributed lag technique, the study found that lagged external debt, exchange rate and fiscal deficit significantly impacts external debt servicing in Nigeria. Therefore, it was recommended that government should use external loans productively; public policy should be geared towards export promotion; and interest rate should be very low.

 fiscal balance financing gap sustainability domestic resource gap trade gap. Full Text

The accumulation of debt for developmental purpose has failed to yield the desirable transformation. So, the study investigated the impact of fiscal deficit financing on external debt sustainability in Nigeria. The dual gap theory formed the basis of the study. Using annual time series data from 1981 to 2020 and the Autoregressive distributed lag technique, the study found that lagged external debt, exchange rate and fiscal deficit significantly impacts external debt servicing in Nigeria. Therefore, it was recommended that government should use external loans productively; public policy should be geared towards export promotion; and interest rate should be very low.