External Borrowing, Government Expenditure and Road Construction in Nigeria
Journal Title: Journal of Economics, Finance and Management Studies - Year 2023, Vol 6, Issue 07
Abstract
External borrowing is a significant source of government revenue, and the increase in the levels of foreign borrowing is taken as evidence of progress toward meeting economic and infrastructure goals. Despite the massive incidence of foreign borrowings, developing nations continue to lag behind established economies in terms of quality, quantity, and accessibility to the benefits of infrastructural development. Therefore, this study analyses the effect of external borrowing on government expenditure on road construction in Nigeria. The study is anchored on the debt crowding theory. In analyzing the effect of external borrowing on macroeconomic performance in Nigeria, an Autoregressive Distributed Lag (ARDL) model framework was employed. The data for the study is a time series trend from the 1991-2022 periods. The ARDL result in the long run, external borrowing and interest rate exhibit significantly negative influence on government expenditure on road construction, as a percentage increase in both variables is seen to reduce expenditure on road construction by 0.26 and 12.3 percent respectively. Conversely, exchange rate and inflation have a significantly positive relationship with expenditure on road construction. A percentage increase in the exchange rate will increase expenditure on road construction by 1.66 percent. Similarly, a percentage increase in inflation will increase expenditure on road construction by 1.3 percent. The study indicates that the Federal Government of Nigeria must be methodical in its funding sources to provide infrastructure development facilities. While external borrowing is necessary, looking inward to create more revenue ways should be considered because it is less expensive. It was stated that foreign borrowing had a negative yet significant impact on Nigerian road construction.
Authors and Affiliations
OYEDOKUN Godwin Emmanuel, ADEWINLE Olajide Martins
Keywords
Related Articles
- EP ID EP727197
- DOI 10.47191/jefms/v6-i7-03
- Views 75
- Downloads 0
The Effect Of Transformational Leadership, Organizational Culture, And Management Control System On Employee Performance With Organizational Commitment As The Intervening Variable At CV Makmur Jaya Abadi Surabaya City
Human resource is the most important asset in a company because it is a resource that directs, maintains and develops the company. Company progress comes from good employee performance. Employee performance is influenced...
The Role Of E-Commerce In Increasing Msme Income In The Covid-19 Pandemic (Survey On Msme In Medan City)
The problem is that more than 53% of MSMEs experience a decline in asset value. Then, two-thirds of MSMEs experienced a decline in income during the pandemic, while more than 80% recorded lower profit margins during COVI...
Shariah Financing Model on Salt Mini Plant UTM in Order to Increase Production and Income Numbers
The purpose of this study is to provide an alternative model of Islamic financing to the salt business, namely the Mini Plant of Salt UTM. The existence of a shariah financing system that applies the principle of profit...
Personalize Consumer Needs in Digital Marketing to Attract Medical Technology Awareness
As an information technology company for health facilities, in building information and expanding reach to the target market through Instagram social media, this medical technology company carries out social media activi...
Economic and Environmental Degradation in ASEAN: A Focus on Indonesia, Singapore, and Myanmar
This study aims to analyze the determinants of greenhouse gas emissions in several ASEAN countries. The research utilizes secondary data from the World Bank covering the period from 1990 to 2019, employing panel data reg...