Effects of Mounting Public Debt on Economic Growth in Nigeria
Article Sidebar
Main Article Content
This study used the Auto Regression Distributed Lag (ARDL) technique to analyze the relationship between public debt and economic development in Nigeria between 1999 and 2023. The study specifically looked into how Nigeria's inflation rate, external debt, and domestic debt affected the country's economic growth. GDP served as a stand-in for economic growth, and the explanatory variables were the inflation rate (IFN), external debt (ED), and domestic debt (DM). The findings showed that all three factors (DM), ED, and INF had little long-term effects on economic growth. All variables, however, were found to have a negligible long-term relationship with economic growth. Long-term economic growth was found to be positively and marginally correlated with both the inflation rate and domestic debt, suggesting that raising both will eventually boost Nigeria's economy. However, there was a negative and negligible impact of external debt on economic development. In other words, their rise will eventually slow Nigeria's economic progress. The study came to the conclusion that public debt indices have little long-term effect on Nigeria's economic growth. Therefore, it is advised that policymakers incorporate the necessary steps to guarantee appropriate management of domestic debts. The government should make sure that accrued national debts are used to promote investment in the nation and, through the appropriate monitoring committees, ensure that national debts are used to provide the essential facilities and services needed for the advancement of the nation's communities and societies.
Downloads
References
Abiodun, A., & Uche, J. U. (2023). Domestic public debt and economic growth in Nigeria: Effect of Political Regimes. International Journal of Finance and Banking Research, 1(3), 50-57.
Adams, R.A. (2004). Public sector accounting and finance made simple 3rd ed. Lagos: Corporate ventures Publishers.
Dairu, O.O. (2017). Public finance: A theoretical approach 1st ed. Lagos: Cearce Publishers Ltd.
David, S.M., & Moore, R.A. (2015). Management principles for developing nations. Journal of Public Administration and Social Sciences, 2(3), 106-121.
Eke, C.K., & Akujuobi, N.E. (2021). Public debt and economic growth in Nigeria: An empirical investigation.
International Journal of Development and Management Review (INJODEMAR), 16(1), 178-192.
Eze, T.C., & Ukwueni, N.O. (2023). Impact of public debts accumulation on economic growth in Nigeria: Issues and implications for economic recovery. ABUAD Journal of Social and Management Sciences (AJSMS), 4(1), 105-129.
Gupta, O.O., & Gamaliel, W.N. (2000). Public finance and accounting 3rd ed. Lagos: RCUM Publishers Ltd.
Joyede, B.K., & Oni, J. (2016). Public debt: An analysis of the rate of compliance with repayment terms in Nigeria. Journal of Economics and Political Sciences, 3(1), 121-132.
Katuma, S.P. (2001). Towards minimization of external borrowing by government of developing nations. Journal of Economics and Contemporary Studies, 2(4), 103-117.
Hylon, T., & Krusan, W.I. (2001). Economic growth indicators for developed and developing nations. Journal of International Relations and Politics, 2(1), 264-277.
Lawal, N.W., & Munna, A.A. (2017). Tax and fiscal policy in Nigeria. 1st ed. Ibadan: Oskkit Ltd Publishers.
Mokuolu, J.O. (2021). External debt and economic growth in Nigeria: Is there a Nexus? International Journal of Economics, Business and Management Research, 5(5), 304-313.
Nanfa, N., Ajang, J.D., Timnan, B.N., Azi, I.M., Dieman, A.A, Magit, E.D., & Janet, O.S. (2023). Effect of public debt on poverty reduction in Nigeria. International Journal of Social Science and Economic Research, 8(1), 2455-8834.
Ndubuisi, P. (2017). Analysis of the impact of external debt on economic growth in an emerging economy. Enugu: Macmillan Press.
Orgah, A.P. (2013). Economic growth issues in Nigeria. Journal of Political Science, 1(3), 14-27.
Sam K.H. (2021). Public debt and economic growth: Contemporary evidence from a developing economy. Asian Journal of Economic and Banking, 5(2), 173-193.
Samson, O., Jonathan, E.E. (2017). The effect of debt burden on the Nigerian economy. Lagos: Macmillan Press.
Uboka, O.T., & Lari, B. (2011). Public finance perspective. Lagos: DNIM Ltd Publishers.
Usman U. (2022). Domestic debt and economic growth nexus in Nigeria: Department of Economics, Faculty of Social Sciences, Bauchi State University, Gudau Nigeria 1, 2 & 3.
Economic Confidential. (2020). Nigeria’s Debt Hits ₦31 Trillion in Q3 2020.
Essien, S.N., Agboegbulem, N.T.I., Mba, M.K., and Onumonu, O.G (2016). An empirical analysis of the macroeconomic impact of public debt in Nigeria. CBN Journal of applied statistics vol. 7 No. 1 (a).
Investopedia. (n.d.). Public Debt Definition. Retrieved from https://www.investopedia.com
Joy, J., & Panda, P. K. (2020). Pattern of public debt and debt overhang among BRICS nations: An empirical analysis. Journal of Financial Economic Policy, 12(3), 345– 363. https://doi.org/10.1108/JFEP-01-2019-0021
Koutsoyainnis A, (2007). The Theories of Econometrics. HamshphireMacmillion Education Ltd. (7).
Pattilo, c., Poirson, J., & Ricci, L. A. (2011). External debt and growth, Review of Economies-and Institutions.
The Guardian Nigeria. (2021). Nigeria’s Foreign Debt Hits $33.18bn, Domestic Now N20.64tn.Vanguard. (2020). Nigeria’s Debt Problem and the Options before Us.
World Bank. (2021). Nigeria Economic Update, April 2021: Fighting COVID-19 and Reforming the Economy.
Yusuf, Mohb and McMillan (2021) The impact of government debt on economic growth in Nigeria. Cogent Economic and Finance, Vol9. (1).
This work is licensed under a Creative Commons Attribution 4.0 International License.
All articles published in our journal are licensed under CC-BY 4.0, which permits authors to retain copyright of their work. This license allows for unrestricted use, sharing, and reproduction of the articles, provided that proper credit is given to the original authors and the source.