COMPARATIVE ANALYSIS OF THE IMPACT OF DOMESTIC DEBT ON ECONOMIC GROWTH IN NIGERIA AND GHANA

Abstract

The study compared Nigeria and Ghana's domestic debt (DM) and economic growth (EG) from 2000 to 2021.World Development Indicators, CBN Statistical Bulletin, Ghana Ministry of Finance Annual Debt Statistics, and CBN Annual Report provided secondary data (Time Series) for the study. The study examined Treasury Bills (TBL), Treasury Certificates (TCF), Treasury Bonds (TBD), Development Stock (DST), and Promissory Note (PNT) with one control variable, Interest Rate (INTR), in relation to EG proxied with Real Gross Domestic Product (RGDP) in Nigeria and Ghana. Descriptive statistics, correlation analysis, and multiple regression analysis were performed using E-VIEW version 9.0. The findings indicated The p-value of TBL is 0.4523 for Nigeria and 0.0039 for Ghana, which means that TBL has no effect on RGDP in Nigeria but a substantial effect in Ghana. TCF's p-values of 0.3003 and 0.0700 for Nigeria and Ghana, respectively, are more than 0.05, indicating that TCF has no significant effect on RGDP in Nigeria and Ghana. TBD's p-values for Nigeria and Ghana are 0.0000 and 0.5921, respectively, which is less than 0.05 for Nigeria but higher than 0.005 for Ghana, indicating that TBD has a substantial effect on RGDP in Nigeria but not in Ghana. DST has a substantial effect on RGDP in Nigeria but not in Ghana. Nigeria's p-value is 0.002, which is less than the specified value of 0.05, whereas Ghana's is 0.8106, which is greater than 0.005. Nigeria's p-value of 0.1622 is higher than the set value of 0.05, whereas Ghana's is less than 0.005, indicating that PNT has a substantial effect on RGDP in Ghana but not in Nigeria. INTR's p-values for Nigeria and Ghana are 0.5667 and 0.0371, respectively, which are more than 0.05 for Nigeria but less than 0.005 for Ghana, indicating that INTR has no effect on RGDP in Nigeria but a significant effect in Ghana. Finally, the study finds inconsistent effects of domestic factors on EG in Ghana and Nigeria. The government (GOVT) should borrow mostly from FGN bonds. The outcome shows that FGN bonds greatly benefit EG in Nigeria and Ghana.
 Keywords: Debts, Domestic, Economic, Growth and Bonds.