Tag Archives: Public Debt

Effect of Public Debt on Economic Growth of Nigeria: An Empirical Investigation (Published)

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.

Keywords: Domestic debt, External Debt, Public Debt

Economic Performance and Accrual Accounting Reform: OECD versus Non-OECD Countries (Published)

This paper examines whether economic performance indices of nations signals accrual accounting reform or whether they have random effect. The secondary analysis of accrual accounting data distilled from the report of the PWC global survey of accounting and financial reporting practices of 100 central governments was done using the logistic multiple regression model. Economic performance proxied by gross domestic product per capita positively signaled the likelihood of accrual accounting reform with OECD countries 10 times more likely to implement full accrual accounting than non-OECD countries. Growth rate of gross domestic product and debt as percentages of gross domestic product both negatively signaled the adoption accrual accounting reform while tax revenue as percentage of gross domestic product returned a mixed result. The results suggest that poorer non-OECD countries may be constrained by the cost of implementing accrual accounting reform and may therefore require assistance of multilateral development institutions. This study provides empirical evidence of some of the constraints militating against accrual accounting reform that have been canvassed in the literature.

Keywords: Gross Domestic Product, Public Debt, Public Finance, Public Sector Accounting, Tax Revenue, economic growth

Public Debt Sustainability and Incidences of Poverty: Empirical Evidence from Nigeria (Published)

This paper examined the implications of public debt sustainability on poverty incidence in Nigeria. Specifically, the impacts of external debt stock and interest payment on external debt, proxy for external debt servicing on poverty headcount was estimated using Stock-Watson Dynamic Least Squares (DOLS). Data were extracted from the National Bureau of Statistics (NBS) and World Bank World Development Indicators. The Augmented Dickey-Fuller tests results show that the series are difference stationary as they are integrated of order one. The result of the Johansen-Juselius cointegration test reveals that the series have long run relationship. Thus, the null hypothesis of no cointegration is rejected at 5 percent level. The estimated cointegrating regression model shows that external debt stock as a share of GNI has significant positive relationship with poverty headcount as 10 percent increase in external debt stock induces 7.59 percent increase in poverty headcount. This is a pointer that policy intervention should focus on the effective management of the borrowed funds from external sources in order to drive the process of economic development. On the other hand, it was found that interest payments on external debt as a proportion of GNI is negatively related to poverty headcount. This is suggestive that the extent of debt servicing in Nigeria seems not to undermine the sustainable path of debt management and the developmental goal of poverty reduction. Accordingly, it is recommended for improved fiscal consolidation across various levels of government in Nigeria with a view to keeping the economy on the path of sustainability in terms of external debt management.

Keywords: Debt Servicing, Poverty Incidence, Public Debt, Sustainability