Abstract
Effects of Public External Debt and Private Investment on Agricultural Growth in Nigeria:1980-2016
Highlights
It is generally expected that developing countries, facing a scarcity of capital will acquire external loan building up her external debt to supplement domestic saving [1]
The result shows that labour force was stationary at level while agricultural growth, domestic private investment, foreign direct investment and public external debt were stationary at first difference
The result showed that the coefficient of determination (R2) was 0.65 indicting that 65 percent of the variation in agricultural growth was explained by domestic private investment, public external debt, foreign direct investment and labour force
Summary
It is generally expected that developing countries, facing a scarcity of capital will acquire external loan building up her external debt to supplement domestic saving [1]. External debt burden in Nigeria can be traced to so many factors in the past which caused the growth of the economy to decline alongside its development. Heavy external debt burden may have been associated with disincentives to invest, which could have contributed to the relatively poor growth performance of Nigeria in the past. Foreign private investment could play an important role in the economic development of a country especially a developing one like Nigeria. Foreign direct investment surpasses all other forms of lending as a source of foreign capital to developing countries because it disseminates advanced technology and managerial practices through the host country and thereby exhibit greater positive externalities compared to foreign portfolio investment which may not involve positive transfer but just a change in ownership. Available data suggests that foreign direct investment flows tend to be more stable compared to foreign portfolio investment [6,7]
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