Nigeria’s External Debt Crisis and Challenges of Governance: Towards an Expository Re-assessment
Nigeria’s external debt, which pre-independence stood at a tolerable level, assumed a serious dimension from 1978 until 2005 when a major reprieve came through debt forgiveness by the Paris Club of creditors. Literature and empirical studies emphasise debt forgiveness as antidote to the debt crisis. This study contends that more critical is the challenge of institutional governance in debt management, in the absence of which loans gravitate to ‘dead weight’ status. Consequently, the paper attempts an expository re-examination of the governance question in public external debt management, with particular focus on institutions and their critical roles in the external debt crisis which plagued Nigeria during the referenced period. Underpinned by Structural-Functionalism, the study adopts content analytical design and finds that in line with theory and literature, the major cause of the inefficient management of Nigeria’s external debt lies in weak and dysfunctional institutions. Accordingly, the study recommends that the existing institutional framework for external debt management in Nigeria should be overhauled, to improve governance.