IDEAS home Printed from https://ideas.repec.org/a/taf/oaefxx/v9y2021i1p1946249.html
   My bibliography  Save this article

The impact of government debt on economic growth in Nigeria

Author

Listed:
  • Abdulkarim Yusuf
  • Saidatulakmal Mohd
  • David McMillan

Abstract

This study investigated the effect of government debt on Nigeria’s economic growth using annual data from 1980 to 2018 and the Autoregressive Distributed Lag technique. The empirical results showed that external debt constituted an impediment to long-term growth while its short-term effect was growth-enhancing. Domestic debt had a significant positive impact on long-term growth while its short-term effect was negative. In the long term and short term, debt service payments led to growth retardation confirming debt overhang effect. The findings suggested that the government should direct the borrowed funds to the diversification of the productive base of the economy. This will improve long-term economic growth, expand the revenue base and strengthen the capacity to repay outstanding debts when due. Fiscal improvements that encourage domestic resource mobilization, efficient debt management strategies and reliance on domestic debt rather than external debt for increased deficit financing to engender greater growth are the main contribution of the study.

Suggested Citation

  • Abdulkarim Yusuf & Saidatulakmal Mohd & David McMillan, 2021. "The impact of government debt on economic growth in Nigeria," Cogent Economics & Finance, Taylor & Francis Journals, vol. 9(1), pages 1946249-194, January.
  • Handle: RePEc:taf:oaefxx:v:9:y:2021:i:1:p:1946249
    DOI: 10.1080/23322039.2021.1946249
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/23322039.2021.1946249
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/23322039.2021.1946249?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Elena Alina OLARU (COLBEA), 2023. "Effects of IPSAS Adoption in Public Institutions in Romania on the Quality of Financial Reporting," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 4(3), pages 62-72, March.
    2. Favour C. Onuoha & Stephen K. Dimnwobi & Kingsley I. Okere & Chukwunonso Ekesiobi, 2023. "Sustainability Burden or Boost? Examining the Effect of Public Debt on Renewable Energy Consumption in Sub-Saharan Africa," Working Papers 23/031, European Xtramile Centre of African Studies (EXCAS).
    3. Oluseyi Omosuyi, 2024. "Public And Publicly Guaranteed External Debt, Debt Servicing And Investment In Emerging Economies," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 69(240), pages 31-56, January –.
    4. Yeboah Evans, 2024. "The relationship between foreign direct investment and trade openness: Evidence from six developed economies," Economic and Regional Studies / Studia Ekonomiczne i Regionalne, Sciendo, vol. 17(2), pages 222-250.
    5. Okere, Kingsley Ikechukwu & Dimnwobi, Stephen Kelechi & Ekesiobi, Chukwunonso & Onuoha, Favour Chidinma, 2023. "Turning the tide on energy poverty in sub-Saharan Africa: Does public debt matter?," Energy, Elsevier, vol. 282(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:oaefxx:v:9:y:2021:i:1:p:1946249. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/OAEF20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.