Public Debt and Economic Growth in Nigeria

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

“…All over the world, the issue of public debt proliferation suffered by numerous developing countries has attracted global attention; this experience which is occasioned by the fall in oil prices, exchange rate volatility, increasing interest rate etc. has exerted a negative effect on the economy of developing economies across the globe especially Nigeria (Favour, Ideniyi, Oge and Charity, 2017). Debt or borrowings have been described as an important instrument of fiscal policy available to government to fund the development of a nation.…”

“…The spate of public debt especially in developing countries since the beginning of the 21 st century has been alarming. This is undoubtedly because the heightening level of government debt in any country can be deleterious to the growth its economy especially if not properly managed (Favor et al, 2017). However, public debt intensifies when the government consistently experience budget deficits.…”

“…However, public debt intensifies when the government consistently experience budget deficits. Put differently, the aggregate of borrowings owed by government at all level is referred to as public debt; such borrowings can be caused when services like pension payment owed to its employees or in form of contract entered by the government with a backlog of owing (Favor et al, 2017). Also, government can initiate borrowings through treasury bills, bonds, issuing securities and directly from international financial institutions.…”

“…Economic growth has been referred to as the aggregate of the final output that a country can create within a year judged by the market price of the products taking cognizance of price variation and the imputed cost of the economy's produced goods and services less net income from abroad (Favor et al, 2017). An increase in the gross domestic product of a country is noticed as the productive capacity of the country accrues, especially when measured relative to other periods.…”

The Relationship Between External Debt, Internal Debt and Economic Growth: An Empirical Analysis on Brics-Tm Countries - Diş Borç, İç Borç Ve Ekonomi̇k Büyüme Arasindaki̇ İli̇şki̇: Brics-Tm Ülkeleri̇ Üzeri̇ne Ampi̇ri̇k Bi̇r Anali̇z

“…With reference to their research findings, it can be argued that external and internal debt negatively affect the economic growth. Atique and Malik (2012), Anning (2016) and Favour et al (2017) researched the relationship between these variables by analysing only a single country, and they found out that there was a negative relationship between internal debt, external debt and economic growth. According to Çevik and Cural (2013), there is not a causality relation between internal debt and national income when there is a unidirectional causality from external debt to national income.…”