DEBT BURDEN AND SUSTAINED FISCAL DEFICIT IN NIGERIA: IMPLICATIONS FOR ECONOMIC GROWTH

Base on debt related theories, it is expected a'priori that debts contracted should transcend into improvements in the economic performance of a country. But a survey of the Nigerian economy between 1987- 2005 when significant amount of external debts were contracted using ratios, percentages and tables indicated the contrary and it was suspected that reasons such as, using short term loans to finance long term projects, political rather than economic viability as the criterion for the used of such loans and so on were identified. Again, the rising debt profile oft he country after its exit from the Paris Club necessitated some policy recommendations such as redefining the criteria used in obtaining loans, minimization of debts, the strict enforcement of Decree No, 30 of 1978 among others as measures to ensure the sustainability oft he current debt to avoid another debt trap.