Global Journal of Human Social Science, E: Economics, Volume 22 Issue 7

© 2022. Olayide O. Olaoye & Sunday O. Odumeru. This research/review article is distributed under the terms of the Attribution- NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0). You must give appropriate credit to authors and reference this article if parts of the article are reproduced in any manner. Applicable licensing terms are at https://creativecommons.org/ licenses/by-nc-nd/4.0/. Global Journal of HUMAN-SOCIAL SCIENCE: E Economics Volume 22 Issue 7 Version 1.0 Year 2022 Type: Double Blind Peer Reviewed International Research Journal Publisher: Global Journals Online ISSN: 2249-460x & Print ISSN: 0975-587X Implication of Fiscal Deficit Financing on External Debt Sustainability in Nigeria By Olayide O. Olaoye & Sunday O. Odumeru Ajayi Crowther University Abstract- The accumulation of debt for developmental purpose has failed to yield the desirable transformation. So, the study investigated the impact of fiscal deficit financing on external debt sustainability in Nigeria. The dual gap theory formed the basis of the study. Using annual time series data from 1981 to 2020 and the Autoregressive distributed lag technique, the study found that lagged external debt, exchange rate and fiscal deficit significantly impacts external debt servicing in Nigeria. Therefore, it was recommended that government should use external loans productively; public policy should be geared towards export promotion; and interest rate should be very low. Keywords: fiscal balance, financing gap, sustainability, domestic resource gap, trade gap. GJHSS-E Classification: DDC Code: 346.42022 LCC Code: KD1554 ImplicationofFiscalDeficitFinancingonExternalDebtSustainabilityinNigeria Strictly as per the compliance and regulations of: