IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 10 NO. 9 2024
DOI: 10.56201/jafm.v10.no9.2024.pg199.209

---

Impact of Public Debt on Human Capital Index in Nigeria

MBACHU, Eseosa & ONUORA, Joshua Kenechukwu

---

Abstract

This study ascertained the effect of public debt on human capital index in Nigeria. The study extracted the data from the Central Bank of Nigeria (CBN) Statistical Bulletin and World Bank data spanning the period from 1999 to 2022. Descriptive analysis was used to analyze the data multiple regression was employed to test the hypotheses. The study found that both external debt and domestic debt were statistically significant on human capital index. Given the predictive relationship between the human capital index and public debt, it is evident that as the country's economy expands, external and domestic debts also tend to increase. However, this scenario should be avoided. Based on this, it was advice that government is advised to focus on enhancing local productivity and utilizing local financial resources more effectively.

keywords:

Public Debt, External Debt, Domestic Debt and Human Capital Index

---

References:

Agu, F.N, Ugwuanyi, W. N.J., Anyanwaokoro, M. & Sa’adatu A. (2023). Impact of Public Debt
on Economic Growth of Nigeria, 1990-2021 IJMGS Vol.3(2),
Atueyi, C.L. (2019). External debt on human capital development in Nigeria (1986-2017).
International Journal of Business and Economics, 7(1), 49-58.
Barik, A., & Sahu, J.P. (2020). The long-run effect of public debt on economic growth: Evidence
from India. Journal of Public Affairs. https://doi.org/10.1002/pa.2281.
Bhatta, G. P., & Mishra, A. (2020). Estimating optimum growth-maximizing public debt
threshold for Nepal. NRB Economic Review, 32(2), 1–28.
Central Bank of Nigeria (2009). Annual reports and financial statement of accounts. Abuja:
CBN.
Central Bank of Nigeria (2021). Statistical Bulletin. Abuja: CBN.
Dahal, M. P. (2016). Public debt stock, education- centric human capital and economic growth in
Nepal. Economic Journal of Development Issues, 76-104.
Fosu, A.K. (2007). Fiscal allocation for education in sub-Saharan Africa: Implications of the
external
debt
service
constraint.
World
Development,
35(4),
702-713.
doi:10.1016/j.worlddev.2006.06.008.
Fosu, A.K. (2008). Implications of the external debt-servicing constraint for public health
expenditure in sub-Saharan Africa. Oxford Development Studies, 36(4), 363-377. doi:
10.1080/13600810802455112.
Igudia, P.O. (2021). Impact of external debt servicing on human capital development in Nigeria:
1960-2019. International Journal of Business & Law Research, 9(3), 38-55
International Monetary Fund (2018). Fiscal monitor: Capitalising on good times, World
Economic and Financial Surveys. International Monetary Fund: Washington DC.
Islam, Md. E., & Biswas, B. P. (2005). Public debt management and debt sustainability in
Bangladesh. The Bangladesh Development Studies, Vol. XXXI, No. 1 & 2.
Karazijien?, Ž. (2015). Critical analysis of public debt and tendencies of its management. Public
Policy and Administration, 14(2), 194-208. https://doi.org/10.13165/VPA-15-14-2-03.
Karazijien?, Ž. (2015). Critical analysis of public debt and tendencies of its management. Public
Policy and Administration, 14(2), 194-208. https://doi.org/10.13165/VPA-15-14-2-03.
Lora, E., & Olivera, M. (2007). Public debt and social expenditure: Friends or foes? Emerging
Markets Review, 8, 299-310. https://doi.org/10.1016/j.ememar.2006.12.004.
Matthew, A., & Mordecai, B. D. (2016). The impact of public debt on economic development of
Nigeria. Asian Research Journal of Arts & Social Sciences, 1-16.
Nwokoye, E. S.; Dimnwobi, S. K.; Onuoha, F. C. & Madichie, C. V. (2024).Does Public Debt
Matter for Human Capital Development? Evidence from Nigeria, AGDI Working Paper,
No. WP/24/006, African Governance and Development Institute (AGDI), Yaoundé
Nwokoye, E., Onugha, C., & Kalu, C. (2020). Drivers of human capital development: Evidences
from Nigeria. Timisoara Journal of Economics and Business, 13(1), 15-30.
https://doi.org/10.2478/tjeb-2020-0002.
Okere, K.I., Dimnwobi, S.K., Ekesiobi, C., & Onuoha, F.C. (2023). Turning the tide on energy
poverty
in
sub-Saharan
Africa:
Does
public
debt
matter?
Energy.
https://doi.org/10.1016/j.energy.2023.128365
Onafowora, O., & Owoye, O. (2017). Impact of external debt shocks on economic growth in
Nigeria: A SVAR analysis. Economic Change and Restructuring. Retrieved from
https://doi.org/10.1007/s10644-017-9222-5.
Onuoha, F.C., Dimnwobi, S. K., Okere, K. I., & Ekesiobi, C. (2023a). Funding the green
transition: Governance quality, public debt, and renewable energy consumption in Sub-
Saharan Africa. Utilities Policy. https://doi.org/10.1016/j.jup.2023.101574.
Opara, I. V, Nzotta, S.M. & Kanu, S. I. (2021). Nigeria’s Domestic Public Debts and Economic
Development.
International
Journal
of
Management
Science
and
Business
Administration. 7, no. 5, Pages 7-22.
Organization for Economic Co-operation and Development (2012). Debt and macroeconomic
stability. Economics Department Policy Notes No. 16.
Ostry, J.D., Ghosh, A.R., & Espinoza, R. (2015). When should public debt be reduced?
International Monetary Fund Discussion Note SDN/15/10.
Pitambar S. (2023). Effects of Public Debt on Economic Growth of Nepal. The Lumbini Journal
of Business and Economics XI(1).
Salmon, J. (2021). The impact of public debt on economic growth. The Cato Journal 41 (3): 487-
Saungweme, T., & Odhiambo, N.M (2020). The impact of domestic and foreign public debt on
economic growth: Empirical evidence from Zimbabwe. International Economics, 73(1),
77-106.
Sharma, Y. R. (2014). Trend and impact of public debt in Nepalese economy. Academic Voices:
A Multidisciplinary Journal, 4(1).
Shabbir, S., & Yasin, H.M. (2015). Implications of public external debt for social spending: A
case study of selected Asian developing countries. The Lahore Journal of Economics,
20(1), 71-103.
Shuaibu, M., & Oladayo, P. T. (2016). Determinants of human capital development in Africa: A
panel
data
analysis.
Oeconomia
Copernicana,
7(4),
523-549.
https://doi.org/10.12775/OeC.2016.030.
Stasavage, D. (2003). Public debt and the birth of the democratic state. Cambridge University
Press, United Kingdom.
Saungweme, T., & Odhiambo, N.M (2020). The impact of domestic and foreign public debt on
economic growth: Empirical evidence from Zimbabwe. International Economics, 73(1),
77-106.
Upadhyaya, T. P., & Pun, T. (2022). Public debt and economic growth of Nepal. Journal of
Financial Risk Management, 11(2), 353-384.
Wang, Z., Bui, Q., Zhang, B., Nawarathna, C. L. K., & Mombeui, C. (2020). The nexus between
renewable energy consumption and human development in BRICS countries: The
moderating
role
of
public
debt.
Renewable
Energy.
https://doi.org/10.1016/j.renene.2020.10.144.
Whajah, J., Bokpin, G. A., & Kuttu, S. (2019). Government size, public debt and inclusive
growth in Africa. Research in International Business and Finance, 49, 225-240.
https://doi.org/10.1016/j.ribaf.2019.03.008.

DOWNLOAD PDF

---

Back