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Debt Financing and Economic Growth: Evidence of Nigeria Economy

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  • Akpovofene Erhinyodavwe J.

    (Department of Accountancy,Niger Delta University, Amasoma, Bayelsa State, Nigeria)

  • Kpolode, Oghenevwo P.

    (Department of Accountancy,Niger Delta University, Amasoma, Bayelsa State, Nigeria)

Abstract

We analyzed implication of debt financing on Nigeria economic growth, by considering all the debt elements such as total external debt, FGN only, states & FCT, total domestic debt, FGN only and states & FCT, with the help of multiple regression on data covering from 2010 to 2022 and discovered that; debt finance has a positive correlation and impact on economic growth, the statistical value also reveal a very significant positive relationship among the variables at 0.0000, which negated our null hypothesis proposed above. Our model is also statistically significant with a probability level of 0.000041, at a confidence level of 87% approximately. Therefore we recommended that: Debt employed by government should be cannel into more productive sector in order to yield more positive returns; Comparative analysis, i.e., cost benefit analysis should be carryout by government officials before engaging in borrowing; and there should be proper monitoring of borrowed fund, in order to avoid diversion.

Suggested Citation

  • Akpovofene Erhinyodavwe J. & Kpolode, Oghenevwo P., 2023. "Debt Financing and Economic Growth: Evidence of Nigeria Economy," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 10(7), pages 78-83, July.
    • Handle: RePEc:bjc:journl:v:10:y:2023:i:7:p:78-83
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