External Debt and Exchange Rate Fluctuations in Nigeria (1990-2017)

This paper utilised Dynamic Ordinary Least Square alongside Granger causality techniques in investigating how debt from overseas and exchange rate fluctuations interacted in Nigeria. The principal variables were analysed from 1990 to 2017. The analyses confirmed that the exchange rate fluctuation and external debt have an insignificant direct relationship. However, the exchange rate fluctuation and debt service payments had a significant direct relationship. Also, the foreign reserves positively and significantly influenced the exchange rate fluctuation. Similarly, one-way feedback flows from foreign reserves to external debt.As a result of the study findings, this paper recommended that the goal of the policymakers should be the achievement of the SDGs goal eight – Inclusive and sustainable economic growth. Therefore, external debt is not a sustainable means of financing the deficit budget in Nigeria due to the fact that servicing of debt and repayment cause fluctuations in the exchange rate of the country.