All countries aim to expand and flourish economically, but this expansion depends on having sufficient resources. Emerging nations like Nigeria often lack these resources due to low domestic savings, reduced tax revenues, low productivity, and little foreign exchange profits. To address gaps between savings and investment needs, these countries turn to external funding. This reliance on foreign funds leads developing nations, including Nigeria, to accumulate significant external debt. High levels of such debt can directly slow economic expansion and inhibit sustainable development by diverting resources from productive investment toward debt servicing. In this context, a debt instrument remains a financial claim that requires the payment of interest, principal, or both in the future, whereas external debt represents the total current obligations to non-residents. The theoretical framework is based on the debt overhang hypothesis. Descriptive and econometric analyses reveal the average, minimum, and maximum values of key economic indicators: external debt, GDP, inflation rate, and unemployment. This research found a moderate positive correlation between external debt and GDP; as external debt increased, so did GDP. Positive coefficients for GDP and inflation rate indicate these variables tend to rise with external debt, while negative coefficients for unemployment show an inverse relationship, clarifying how each variable interacts within the model.