EFFECT OF DEBT SERVICE ON INFRASTRUCTURAL DEVELOPMENT IN NIGERIA

Abstract

The study examines the effect of debt services on infrastructural development in Nigeria. The increase in debt services has been worrisome; recently Nigeria’s debt service has astronomically increased without interruption. This uninterrupted increase of debt service has resulted to decrease in infrastructure, consequently, decreasing private investment and aggregate demand, thus, increasing unemployment in the country. The study employed an econometric model to test a long run relationship between debt services and infrastructural development and found a long run relationship. The study also found a negative and statistically significant relationship between debt services and infrastructure in Nigeria. Based on the findings, the study recommended that government should look for alternative means of raising fund rather than borrowing.