Public Debt and Economic Growth in Nigeria
Abstract
Improving financial infrastructure to support economic progress has long been the goal of developing countries' rising public debt. In scholarly circles, the significance of this argument for Nigeria has not abated. This study set out to examine the relationship between Nigeria's economic development and public debt from 1960 to 2019 as well as the evolution of the country's total debt rate over that time. The National Bureau of Statistics (NBS), the Central Bank of Nigeria (CBN) Statistical Bulletin, and reports from the Debt Management Office (DMO) spanning multiple years provided the data for the study. Techniques for linear regression were applied to analyze the gathered data. The GDP variation is explained by foreign debt at 0.727 (72.7%) and domestic debt at 0.869 (86.9%), for a combined impact of 0.872 (87.2%). The F-cal value of 64.99 and the t-statistic of 8.062 for foreign debts respectively. For F-cal and t-cal domestic loans, it produced yields of 178.589 and 13.364, respectively. This demonstrates how debt, both domestic and foreign, significantly impacted Nigeria's economic growth between 1960 and 2019. Consequently, it was determined that Nigeria ought to utilize both debt profiles in order to develop its economy. In terms of the debt growth rate, it worked in tandem with the previous one because the total debt growth rate remained within the range of projected values. In contrast to an F-critical of 4.0012 and a t-crit of 1.671, it obtained an F-cal of 3.493 and a t-cal of -1.869. Thus, in order to promote economic progress, it was agreed that the government should borrow money for legitimate purposes.
Keywords
Public DebtEconomic GrowthNominal Gross Domestic Product
References
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