Public External Debt, Domestic Private Investment, and Agricultural Output Nexus: Empirical Evidence from Nigeria

Abstract

The recent debate of research is the conflicting view concerning public debt and empowerment of the private sector as a driving force for the sustainability of the economy. Therefore, this study was undertaken to evaluate public external debt, private investment, and agricultural output nexus. The result of the study showed that by increasing public external debt and decreasing domestic private investment the simulated data was higher compared to the baseline result implying that it supports the Keynesian view. By decreasing public external debt and increasing domestic private investment, the scenario simulated data, for agricultural growth were lower compared to the baseline implying that private investment alone cannot sustain agricultural growth in Nigeria. It was, therefore, recommended that specialized development agencies should be set up to implement and evaluate government policies on foreign external debt and domestic private investment.