IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF SOCIAL SCIENCES AND MANAGEMENT RESEARCH (IJSSMR )

E-ISSN 2545-5303
P-ISSN 2695-2203
VOL. 10 NO. 10 2024
DOI: 10.56201/ijssmr.v10.no10.2024.pg156.166

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Impact of Domestic Debt on Economic Growth in Nigeria

Umaru Musa, Ndigefe Earnest Johnson and Zechariah Wanujeh

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Abstract

This study was carried out to ascertain the impact of domestic debt on economic growth in Nigeria from 1986 to 2022. Ex – post facto research design was employed; data used for analysis were elicited from Central Bank Statistical Bulletin of 2018 and World Bank Database: World Development Indicator 2018. Gross domestic product (GDP) was employed as the dependent variable, while ratio domestic debt – revenue, technology and ratio of domestic debt – gross domestic product were utilized as proxy for domestic debt and exchange rate was employed as a control variable. This study employed Auto Regressive Distributed Lag (ARDL) Model to analyze data, other diagnostic tests such as; Cointegration test, unit root test, bound test were also carried out and they confirmed the validity and reliability of the model employed; the inferential results suggested that public debt had positive and significant impact on economic growth in Nigeria. The study recommended that the positive effect of ratio of domestic debt – revenue on gross domestic product (GDP) First, debt management office (DMO) should keep proactive advice on the government on how to make a prudence management of debt that can add value to economic growth, the negative effect ratio domestic debt – GDP on economic growth. It was recommended that debt management office should prioritize productive investment that can serve as a catalyst for economic growth, and also make available sustainable deficit budgeting, and effective utilization of resources, through effective and efficient implementation of projects and programs.

keywords:

Domestic Debt, Economic Growth

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