External Debt and Human Development in Sub-Saharan Africa: The Nigerian Case

Abstract

The issue of external debt and human development in sub-Saharan Africa with particular reference to Nigeria has risen to the top of the agenda in Nigeria’s politico - economic discourse. It is against this background that this paper examines the implications of external debt on poverty alleviation. The tenet of the paper is to ascertain the extent to which external loans have reduced the incidence of poverty and increase human development. The ordinary least square (OLS) technique was adopted with the use of time series data on aggregate poverty, per capita gross domestic product, inflation, expenditure on education, expenditure on health sector, total debt service and external debt to export ratio. This paper maintains that poverty spread in Nigeria is associated with fallen economic growth, high rate of inflation, and inadequate expenditure on education and health sectors. In order to step up economic growth, human development and reduce poverty, there is need to step up the productive sector. Handling this with a wave of the hands the paper argues, renders the poverty alleviation efforts associated with external loans an illusion.