Regression Analysis Of External Debt Management On Democracy In Nigeria

Project and Seminar Material for Economics

Chapter One

Introduction

1.1 Background of the Study

External debt is the total debt the nation owes to foreign creditors; while the internal debt constitute the debt owed to domestic lenders. The debtors include the government, firms or citizens of that nation. The debt consist of funds owed to private commercial banks, the governments, other nations or external financial institutions such as the International Monetary Fund (IMF) and the World Bank.

According to the International Monetary Fund, “Gross external debt constitute the money disbursed at any given time and outstanding contractual liabilities of people or government of a nation to other people or government of a nation to repay principal, with or without interest, or to pay interest, with or without principal.

Democracy is a system of government where the citizens exercise power by voting in elected government who in turn return democratic dividends to the people . When the government is involved in external borrowing there is a tendency that the democratic dividends could be affected.The study seek to proffer a study on a regression analysis of external debt management on democracy in Nigeria.

1.2 Statement of the Problem

The sourcing of external debt has the advantages of contributing to the quality of good governance through the provision of infrastructure and basic amenities as democratic dividends to the people. However the disadvantage which accrues can sometimes affect the economy negatively. Indeed, debt leads to a loss of flexibility in any policy. A high level of debt attracts fixed charges which increases the financial liabilities of the nation. Consequently the opportunity cost associated with this situation shows that a nation cannot borrow again in order to exploit new opportunities such as procuring new technology and penetrating other markets. The loss of flexibility also affects macroeconomic issues. Hence government resources and right to provide for the needs of the people is restricted due to the increased associated cost of democratic dividends. Also the functioning of the State, the remuneration of the Members of Parliament are affected which may lead to breakdown in law and order. The problem confronting the study is to proffer a study on a regression analysis of external debt management on democracy in Nigeria.

1.3 Objective of the Study

The Main Objective of the research is a study on a regression analysis of external debt management on democracy in Nigeria;

The specific objectives include

To determine the relevance of external debt management.
To determine the level of democracy in Nigeria.
To proffer a regression analysis of external debt management on democracy in Nigeria.

1.4 Research Questions

What is the relevance of external debt management?
What is the level of democracy in Nigeria?
What is the regression analysis of external debt management on democracy in Nigeria?

1.5 Statement of the Hypothesis

The statement of the hypothesis for the study is stated in Null as follows

HO There is no relationship between external debt management on democracy in Nigeria.

1.6 Significance of the Study

The research proffers a regression analysis of external debt management on democracy in Nigeria. It provides relevant data for the effective formulation and implementation of policies to enhance the realization of envisaged objective.

1.7 Scope of the Study

The research proffers a regression analysis of external debt management on democracy in Nigeria.

1.8 Limitation of the Study

The study was confronted with logistics and geographical factors.

1.9 Definition of Terms

External Debt Defined

External debt is the total debt the nation owes to foreign creditors. The debtors include the government, firms or citizens of that nation. The debt consist of funds owed to private commercial banks, the governments, other nations or external financial institutions such as the International Monetary Fund (IMF) and the World Bank.