Journal of Economic and Social Dynamics

Abstract

This study investigated the determinants of debt servicing in Nigeria. Both ex-post facto and longitudinal research methods were used to analyse the Federal Republic of Nigeria's debt servicing and budget implementation from 2008 to 2024. Secondary data was obtained from the FGN's Annual Budget and reports. A time series analysis was carried out to determine these relationships. The study revealed that foreign exchange rates significantly influence Nigeria's debt servicing, while debt servicing does not influence foreign exchange rates. Inflation rates do not significantly influence Nigeria's debt servicing, while debt servicing does influence inflation rates. Also, interest rates and debt service ratios have a strong reciprocal causal relationship. The study recommends that the government should prioritise sound monetary policy for exchange rate stability and fiscal stability, and balance low interest rates to stimulate the economy and reasonable debt service requirements.