External debt implies fund borrowed from international financial institutions but was not paid back. This study examines the impact of external debt on some selected macroeconomic forces in Nigeria: Inflation rate, exchange rate, interest rate, and balance of payment. Time series data were used for the analysis and were sourced from the Central Bank of Nigeria, Statistical bulletin, and other relevant publications. The data are covered from 1987 to 2020. The data were analyzed with some statistical tools; descriptive statistics, trend analysis, correlation matrix, unit root test, cointegration test, long run and autoregressive distributed lag short-run error correction model, post-estimation test, and stability test. The result of the long-run analysis indicates that there is a relationship between external debt and the explanatory variables. In the same vein, the result of the autoregressive distributed lag short error correction model shows that inflation rate, exchange rate, and interest rate influenced external debt and lag one of the balances of payment have a positive significant effect on external debt, respectively. The article recommends among others that debt should be avoided because of its dangerous tendencies, debt management boards should be checkmated because of the level of corruption, and money borrowed should be utilized and financial institutions should encourage local investors by giving financial assistance when there is need.
