Chapter One — 1.1 Background to the Study

Over the past decade, the relationship between external debt servicing and standard of living has become a subject of considerable debate among scholars and industry practitioners alike, particularly within the context of Kano State where operating conditions differ markedly from more developed markets.

Kano State presents a useful setting for examining this relationship precisely because the conditions there — structural, regulatory, and behavioural — differ from those typically assumed in the broader literature, most of which draws on evidence from more developed economies.

1.2 Statement of the Problem

While external debt servicing is widely discussed in policy and industry circles, empirical evidence on its actual effect on standard of living within Kano State remains sparse and, in places, contradictory. This lack of localized, rigorous evidence makes it difficult for decision-makers to know with confidence whether current approaches to external debt servicing are helping or hindering standard of living — a gap this study sets out to close.

1.3 Objectives of the Study

1. To examine the effect of External Debt Servicing on standard of living in Kano State.
2. To assess the extent to which external debt servicing influences standard of living within the study area.
3. To identify the challenges associated with external debt servicing in relation to standard of living.
4. To recommend strategies for optimizing external debt servicing in order to improve standard of living.

1.4 Research Questions

1. What is the effect of external debt servicing on standard of living in Kano State?
2. To what extent does external debt servicing influence standard of living within the study area?
3. What challenges are associated with external debt servicing in relation to standard of living?
4. What strategies can be adopted to optimize external debt servicing in order to improve standard of living?

1.5 Significance of the Study

Beyond its academic contribution to the field of economics, this study has practical value for management teams within Kano State seeking to understand how external debt servicing translates into measurable outcomes around standard of living. It is equally useful to students and future researchers looking for a localized empirical reference on this relationship.

1.6 Scope of the Study

In terms of scope, this MSc study confines itself to Kano State, focusing specifically on how external debt servicing relates to standard of living within that setting. Findings are interpreted within these boundaries rather than as universal claims applicable to every organization or market.