External debt, debt overhang, crowding out effects and capital formation in Nigeria and South Africa
The deficiency of saving in Sub-Saharan Africa, as represented by Nigeria and South Africa has led to shortages in funding capital formation, thereby necessitating external borrowing. This has slowed down and restrained economic growth and development. The questions of external debts determinants, e...
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2016
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| Online Access: | https://etd.uum.edu.my/6040/1/s94971_01.pdf https://etd.uum.edu.my/6040/2/s94971_02.pdf https://etd.uum.edu.my/6040/ |
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| author | Abdullahi, Muhammad Mustapha |
| author_facet | Abdullahi, Muhammad Mustapha |
| author_sort | Abdullahi, Muhammad Mustapha |
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| content_provider | Universiti Utara Malaysia |
| content_source | UUM Electronic Theses |
| continent | Asia |
| country | Malaysia |
| description | The deficiency of saving in Sub-Saharan Africa, as represented by Nigeria and South Africa has led to shortages in funding capital formation, thereby necessitating external borrowing. This has slowed down and restrained economic growth and development. The questions of external debts determinants, effects and causal relationships with
capital formation are yet to be adequately responded to; mainly due to weak and nonrigorous
methods employed in the previous studies. The focus has not been effective and specific. The objective of this study is fourfold; determine factors affecting external debt accumulation, examine effects of external debt on capital formation,
assess impact of debt overhang and crowding out effects on capital formation and investigate causal relationships between external debt and capital formation in Nigeria and South Africa. Autoregressive distributive lag (ARDL) and Vector Autoregressive (VAR) modeling on time series data covering three decades were employed in the study. The results have established that, interest rate and external debt service are the most statistically significant variables explaining external debt accumulation scourge in the selected countries. Additionally, the study has discovered that, external debt has significant negative effects on capital formation in the same manner with debt overhang and crowding out effects. However, these impacts are proven to be more
pronounced on capital formation in Nigeria than in South Africa. It is also established that external debt and capital formation Granger causes each other. The overall implication of the research findings is that speed of capital formation has been retarded by the negative effects of external debts. Measures by the government should be tailored towards improving capital formation by designing policies that will reduce the burden of debt accumulation and reducing the cost of external debt services. This can be done through enhancing the debt management process and improving
efficiency in funds utilization, so as to ensure timely repayment and servicing of debts. |
| format | Thesis |
| id | my.uum.etd-6040 |
| institution | Universiti Utara Malaysia |
| language | en en |
| publishDate | 2016 |
| record_format | eprints |
| spelling | my.uum.etd-60402021-04-05T01:36:10Z https://etd.uum.edu.my/6040/ External debt, debt overhang, crowding out effects and capital formation in Nigeria and South Africa Abdullahi, Muhammad Mustapha HG Finance The deficiency of saving in Sub-Saharan Africa, as represented by Nigeria and South Africa has led to shortages in funding capital formation, thereby necessitating external borrowing. This has slowed down and restrained economic growth and development. The questions of external debts determinants, effects and causal relationships with capital formation are yet to be adequately responded to; mainly due to weak and nonrigorous methods employed in the previous studies. The focus has not been effective and specific. The objective of this study is fourfold; determine factors affecting external debt accumulation, examine effects of external debt on capital formation, assess impact of debt overhang and crowding out effects on capital formation and investigate causal relationships between external debt and capital formation in Nigeria and South Africa. Autoregressive distributive lag (ARDL) and Vector Autoregressive (VAR) modeling on time series data covering three decades were employed in the study. The results have established that, interest rate and external debt service are the most statistically significant variables explaining external debt accumulation scourge in the selected countries. Additionally, the study has discovered that, external debt has significant negative effects on capital formation in the same manner with debt overhang and crowding out effects. However, these impacts are proven to be more pronounced on capital formation in Nigeria than in South Africa. It is also established that external debt and capital formation Granger causes each other. The overall implication of the research findings is that speed of capital formation has been retarded by the negative effects of external debts. Measures by the government should be tailored towards improving capital formation by designing policies that will reduce the burden of debt accumulation and reducing the cost of external debt services. This can be done through enhancing the debt management process and improving efficiency in funds utilization, so as to ensure timely repayment and servicing of debts. 2016 Thesis NonPeerReviewed text en https://etd.uum.edu.my/6040/1/s94971_01.pdf text en https://etd.uum.edu.my/6040/2/s94971_02.pdf Abdullahi, Muhammad Mustapha (2016) External debt, debt overhang, crowding out effects and capital formation in Nigeria and South Africa. PhD. thesis, Universiti Utara Malaysia. |
| spellingShingle | HG Finance Abdullahi, Muhammad Mustapha External debt, debt overhang, crowding out effects and capital formation in Nigeria and South Africa |
| title | External debt, debt overhang, crowding out effects and capital formation in Nigeria and South Africa |
| title_full | External debt, debt overhang, crowding out effects and capital formation in Nigeria and South Africa |
| title_fullStr | External debt, debt overhang, crowding out effects and capital formation in Nigeria and South Africa |
| title_full_unstemmed | External debt, debt overhang, crowding out effects and capital formation in Nigeria and South Africa |
| title_short | External debt, debt overhang, crowding out effects and capital formation in Nigeria and South Africa |
| title_sort | external debt, debt overhang, crowding out effects and capital formation in nigeria and south africa |
| topic | HG Finance |
| url | https://etd.uum.edu.my/6040/1/s94971_01.pdf https://etd.uum.edu.my/6040/2/s94971_02.pdf https://etd.uum.edu.my/6040/ |
| url_provider | http://etd.uum.edu.my/ |