The Effects of Foreign Debt on Nigeria’s Economic Growth: An Examination

External debt has a substantial impact on economic performance. However, this study investigated the effects of foreign debt on economic growth in Nigeria from 1981 to 2022. A quantitative research approach was adopted for this study. The method for estimation was the Auto-Regressive Distributed Lags (ARDL) model. The speed of change between the short-run and long-run of the co-integrating equations was 84.93%. The study used debt overhang theory, the neo-classical theory and endogenous theory as the theoretical framework. The result shows resource restoration effect of external debt services on growth. External debt stock has a positive but not significant relationship with growth. There is a positive but not significant relationship between external debts to economic growth. External debts to debts servicing, inflation and trade openness has a long run positive relationship with economic growth except inflation. The study recommends that given the significant positive long-run effect of external debt, the government must build on long-term economic strategies that take into account the implications of external borrowing for more beneficial. Policymakers are recommended to focus on ensuring that external borrowing is channelled toward projects such as railways, ports, roads, electricity and investments in interest yielding financial assets that will benefit the economy in the long run and much on investment that will yield export goods.