This study examined the effect of public debt on economic growth of Nigeria. Specifically, the study determined the impact of domestic debt on the economic growth of Nigeria; assessed the effect of external debt on the economic growth of Nigeria and analyzed the relationship public debt and the economic growth of Nigeria. Secondary time series data spanning thirty-seven years (1982-2018) was gathered in the study. Data gathered in the study was estimated using descriptive statistics, unit root test, Johansen co-integration test and vector error correction model. Discoveries from the study suggests that external debt exerts a negative long run and short run effect on economic growth of Nigeria and domestic debt was ascertained to exert positive long run and short run effect on economic growth of Nigeria. Based on these findings, the study suggested that policy makers should integrate appropriate measures towards ensuring suitable management of domestic debts; government should ensure that contracted national debts are directed towards encouraging investment in the country and government through necessary monitoring committees should ensure that national debts are directed toward the provision of basic amenities and services required for the development of communities and societies of the nation.
Domestic Debt and the Performance of Nigerian Economy (1990 -2018): Investigating the Nexus (Published)
The study evaluated the relationship between domestic debt and the performance of Nigerian economy;for the period (1990-2018). Secondary data were used and collectedfrom Central Bank of Nigeria Statistical Bulletin. The study used Gross Domestic Product (GDP) and was employed as the dependent variable to measure the performance of the Nigerian economy; whereas, Development Stock, Treasury Bill and Interest rate were also employed as the independent variables.Hypotheses were formulated and tested using time series econometrics Models. The result revealed that the variables do not have unit roots. There is also a long-run equilibrium relationship between domestic debt and Gross Domestic Product. The result confirmed that about 72% short-run adjustment speed from long-run disequilibrium. Domestic debthad a causal relationship with Gross Domestic Product. The coefficient of determination indicated that about 64% of the variations of the performance of Nigerian economy can be explained by changes in domestic debt variables. The study concluded that domestic debt had a causal relationship with performance of the Nigerian economy.Thus, the study recommended that Government and policy makers should maintain a debt bank deposit ratio below 35 percent and resort to increase the tax revenue to finance its projects. Government should divest itself of all projects which the private sector can handle including refining crude oil (petroleum product) and transportation. Government should maintain a proper balance between short term and long term debt instruments in such a way that long term instruments dominate the debt market.
The aim of this study is to verify the empirical relationship between the structure of Nigeria public debts and the nation’s economic performance over the period 1990-2015. The study employ relevant data from CBN statistical bulletin of various issues and the analysis are based on two regression techniques simple and multiple. The simple regression result indicates significant positive relationship at 0.05 level between aggregate public debt and Nigeria GDP. Multiple regression analysis indicate that while the multiple correlation coefficient is significant at 0.05 level, external debt in negatively signed while domestic debt signs positively with Nigeria’s GDP. The regression coefficients are all significant at 0.05 levels with a coefficient of determination (R2) value of 94.5 percent. Given the result, the study concludes that Nigeria public debts are valuable in predicting partially variations in Nigeria’s economic performance. It recommends that Nigeria should emphasis more of domestic debts in place of external debts. This should be done through development of new and varied money and capital markets products as well as enhanced internationalization of the operations of the Nigeria’s capital and money markets. It also recommended that development of indigenous technological potential be given priority to boost Nigeria technology and eventually economic independence.