Author(s): Innocent Chukwuebuka Nnubia,Priscilla Uche Egolum,Chitom Rachael John-Akamelu,Grace Uchechi Obi
The study examined the nexus between the external borrowing, foreign aid and economic growth in Nigeria. The data used were secondary data and were drawn from 1986 to 2016. The data were sourced and obtained from CBN statistical bulletin, published articles, and journals. This study applied ex post facto research design. The data collected were analysed using Pearson Correlation Matrix. The study revealed that economic growth proxied by Gross Domestic Product (GDP) has a positive association with foreign reserves, foreign aid and openness of the economy; but has negative association with external debts at 5% level of significance. The study, therefore among others recommends that Nigeria Government should be mindful of the high cost of capital and move from the practice of external borrowing. They should set a platform where the reserve of the country can be used for infrastructural development in order to support economic growth and that in order to reduce the cost of capital of external borrowing when making decision as regards to external borrowing since it has negative effect on economic growth. Caution should also be taken as regards to external debts because it reduced resources available for investment due to debt servicing.