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Public debt and economic growth in Nigeria: An empirical investigation
Abstract
This paper empirically investigated the effect of public debt on economic growth in Nigeria, covering the period 1981-2018. Employing a co-integration approach, the study revealed prominent among others that a significant short-run relationship exists between Nigeria's public debt and economic growth. Also, the study further showed that whereas both the domestic debt and the external debt variables were statistically significant, only the latter failed the a priori expectation test and thus, exerts a negative contribution to economic growth in Nigeria. On the basis of the findings, the study concluded that most of the external borrowings in Nigeria end up being misappropriated. Hence, the recommendation is that there should be proper ways of monitoring public borrowings with special emphasis on all external debts contracted with a view to ensuring that misappropriation is drastically reduced, if not eradicated.
Keywords: Public debt, Co-integration approach, Economic growth.
