Debt audit-nigeria-draft#3

NIGERIA’S DEBT AUDIT NIGERIA: ORIGIN AND PROFILE OF EXTERNAL DEBT 1.0 EXECUTIVE SUMMARY The act of borrowing creates debt. External debt, therefore, refers to the resources of money in use in a country which is not generated internally and does not in any way come from any local citizens, whether corporate or individual. Debt is thus, a liability represented by a financial instrument of other formal equivalence. The World Bank (1998) describes external debt as the amount of money at any given time disbursed and outstanding contractual liabilities of residents to pay interest, with or without principal. Some theoretical development analyses contend that development projects can be financed successfully with externally borrowed funds. Thus, external borrowing is presupposed to augment domestic resources. Arikawe (2003) conceives debt financing as capable of ensuring faster and smoother growth of economic activities. However, it remains contentious that external borrowings facilitate development in developing poor countries, especially as exemplified by the Nigerian situation. Hence, some contemporary development scholars are gradually making conclusions that external borrowings impact negatively on the economic growth and development of poor countries like Nigeria. Amongst other factors, they point to the assertive and exploitative tendencies of the forces of globalisation in Africa and the rest of the South as responsible for ...