Public Debt Profile, Economic Growth and sustainability in Nigeria

Peter Chinyere Uruakpa¹,
 Zeph Chibueze Abaenewe²

¹Department of Banking & Finance, Abia State University, Nigeri
²Department of Banking & Finance, Imo State University, Nigeria.

Abstract

A consistent rise in net national product or quantitative increase in the productive capacity of a country on a per capita basis is referred to as economic growth. While public debt typically refers to the total amount of national debt, it also includes the debt owed by states, provinces, municipalities, and local governments. Public debt is defined as the total amount of funds disbursed and contractual liabilities of residents of a country to repay principal and other related obligations to non-residents. This study therefore carried out an analysis of public debt profile in Nigeria and its implication on economic growth and sustainability. It looked at the impact of total public debt, external debt, external debt service, domestic debt on Nigeria’s economic growth. The data used were sourced from the CBN Statistical Bulletin from 1981 to 2022. Multiple regression, Cointegration, error correction model and Granger Causality test were used. Findings revealed that external debt and debt servicing have negative impact on the GDP. Domestic debt was found to have positive and significant impact on Nigeria’s economic growth. The study recommended that debt Management Office (DMO) should set mechanisms in motion to ensure that loans are utilized for the purpose for which they were acquired such as revamping of the nation’s refineries while efforts should be made at reducing debt stock and seeking alternative means of fund.

Keywords: Economic Growth, Public debt, Domestic debt, External debt,External debt service.