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

doi:10.37745/ijbmr.vol8.no1p18-38.2020

Cited by 11 publications

(5 citation statements)

References 6 publications

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“…A comparative study of domestic and foreign public debt in Nigeria was undertaken by Ajayi and Edewusi (2020) for the period 1982-2018, with the aid of VECM. It was discovered that domestic public debt exerted a positive effect on economic growth in the short run and long run, whereas foreign public debt had a significant negative effect.…”

Section: Empirical Reviewmentioning

confidence: 99%

“…Some of these studies include Adeleye et al (2015), Osei-Assibey and Dikgang (2020) and Adhikary (2011). Similarly, there has been a sharp divide on the direct impact of sovereign debt on economic growth, in several studies such as Ajayi and Edewusi (2020), Ssempala et al (2020) and Asteriou et al (2021). Several studies, therefore, exist on the direct effects of trade openness and sovereign debt on economic growth in developing countries.…”

Section: Literature Reviewmentioning

confidence: 99%

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Comparative Performance of Trade Openness and Sovereign Debt Accumulation in Fostering Economic Growth of Sub-Saharan African Countries

Edo

2023

Foreign Trade Review

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In the last four decades, sub-Saharan African countries have witnessed a substantial increase in trade openness and sovereign debt (foreign public debt and domestic public debt). The direct and interactive effects of these factors on economic growth are investigated in this study. The investigation covers the period 1980–2020 and employs the generalised method of moment methodology. The estimation results reveal that the direct effect of trade openness and domestic public debt is significantly favourable. The direct effect of foreign public debt is, however, found to be unfavourable. The results also reveal that the interactive effect of trade openness and domestic public debt is significantly favourable, whereas the interactive effect of trade openness and foreign public debt is fairly favourable. The estimation results thus imply that trade openness and sovereign debt are complementary drivers of economic growth in sub-Saharan African countries. In spite of the favourable role of trade openness and sovereign debt, economic growth has yet to achieve the desired level, which does not augur well for employment and welfare. The prospects of growth could be enhanced by strengthening the impact of trade openness and sovereign debt. However, policy makers should be aware of the direct negative impact of foreign public debt on economic growth, and the need to put measures in place to manage it. JEL Codes: F23, H63, F43, O55

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Section: Empirical Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Comparative Performance of Trade Openness and Sovereign Debt Accumulation in Fostering Economic Growth of Sub-Saharan African Countries

Edo

2023

Foreign Trade Review

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“…Instruments used for internal debt include treasury bills, treasury certificates, treasury bonds, development stock and federal government of Nigeria bonds. (Akhanolu, Babajide, Akinjare, Oladeji, & Osuma, 2018).…”

Section: Foreign or External Debtmentioning

confidence: 99%

The Effect of Foreign Debt on the Nigerian Economy

Sylvanus Ushie

2023

African Journal of Accounting and Financial Research

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This study evaluated the effect of foreign debt on the Nigerian economy. Ex-post facto research design was adopted for the study and secondary data were used. A regression model was adopted for the analysis. The population of the study was three hundred and fifty staff of the debt management office Abuja. The sample size for the study was one hundred and fifty respondents that were selected scientifically from various departments of the debt management office. The study revealed that foreign debt has a positive and significant effect on the Nigerian economy. The study concluded that foreign debt is an important factor for the economic growth of developing nations like Nigeria if well managed. It was recommended that financial experts, policy makers, and Central Bank of Nigeria (CBN) should integrate suitable as well as appropriate measures towards ensuring effective management of foreign debt in order to enhance gross domestic product as well as the economic growth and development of Nigeria. That the Nigerian government should put in place more management techniques and restriction on access to external or foreign debt as most of the external debt cannot be accounted for in the infrastructural projects claimed by successive administrations and that external debts should be directed towards encouraging real investment so as to increase capital formation and achieve sustainable economic growth and development in the country.

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“…According to the study's findings, taxes have a large and unfavourable long-and short-term influence on economic growth, but trade openness and economic growth have a positive long-and short-term association. Ajayi and Edewusi (2020) [20] investigated how public debt affected economic growth in Nigeria. The study looked at ~ 33 ~ secondary time series data from 1982 to 2018 that encompassed 37 years.…”

Section: Empirical Reviewmentioning

confidence: 99%

The macroeconomic fluctuations, taxation, and economic performance while controlling for public debt in Nigeria

Festus,

Tolulope,

Francis

et al. 2023

Int. J. Finance Manage. Econ.

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The macroeconomic fluctuations like the price of crude oil, inflation, and unemployment have been the main trending issues in Nigeria because they have an impact on everyone's well-being and also have an impact on the country's economic performance. This study's main goal is to use appropriate econometric models to investigate how macroeconomic fluctuations, taxation, and economic performance are related in Nigeria while adjusting for public debt. The results of the OLS regression model show that economic performance is significantly related to taxation and macroeconomic fluctuation while controlling for the public debt incurred in Nigeria and also show that the tax revenue has a positive significant impact on Nigeria's economic performance. The econometrics model such as OLS regression, unit root test, and the Johansen cointegration was applied. The results of the Johansen cointegration show that Nigeria's economic performance has a long-term relationship with taxation and macroeconomic fluctuation while controlling for public debt. The unit root test reveals that all the series are integrated into order 1 except the public debt, which is integrated into order 2. Therefore, the government should develop infrastructure and educate the populace on artificial intelligence, a new technological innovation that can support businesses in times of economic crisis, while also encouraging businesses and individuals to pay taxes by creating an enabling environment for businesses to thrive to increase national revenue and economic performance, which will ultimately effectively control or lower the public debt.

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

Cited by 11 publications

References 6 publications

Comparative Performance of Trade Openness and Sovereign Debt Accumulation in Fostering Economic Growth of Sub-Saharan African Countries

Comparative Performance of Trade Openness and Sovereign Debt Accumulation in Fostering Economic Growth of Sub-Saharan African Countries

The Effect of Foreign Debt on the Nigerian Economy

The macroeconomic fluctuations, taxation, and economic performance while controlling for public debt in Nigeria

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