Analysis of the Impact of Domestic Debt on the Nigerian Economy: 1980-2021

Abstract

The study investigates the impact of domestic debt on the Nigerian economy from 1980 to 2021 to ascertain, among other things, the relative significance and impact of domestic debt on Nigeria's GDP growth. The study uses quantitative research with a secondary focus on CBN data. The Debt Management Office and Central Bank of Nigeria provided information on the stock of domestic debt, GDP, interest on domestic debt, and capital spending for Nigeria between 1980 and 2020. The gathered data were subjected to a linear regression model, and the model's effectiveness was evaluated using the E-view statistical program. The Unit Root Test and Ordinary Least Square Method were the techniques utilised in this study to assist in explaining the variation and other explanatory variables. The Autoregressive Distributed Lag model (ARDL)-Bound Test is used in the study to investigate and analyse cointegration. According to the findings, Nigeria's economy is negatively impacted by domestic wagers, interest rates on domestic debt and capital expenditures, budget deficits, and private-sector lending. The study suggests good domestic debt management and suitable debt-servicing strategies for the efficient expansion of the economy in light of this finding.