Abstract
Under a Ponzi-game, a policy maker can issue debt and roll it over forever; issuing new debts to pay off debts when it becomes due. This will enable a present value of consumption that exceeds the value of available resources. Through such strategic debt accumulation, current policymaker can restrain future policymaker’s spending. This study seeks to determine whether this strong political weapon has been utilised by the three democratic regimes in Nigeria. Using descriptive analysis and percentile figures, this study carried out trend analysis of debt profile from 1999-2014. Total debt profile has been on the increase up till 2004, after which there was a decline up till 2006; it rose again in 2007, fell in 2008 and rising since 2009. External debt as a proportion of total debt ranges between 63.85% and 78.11% up till 2005; thereafter domestic debt became dominant accounting for between 82.47% and 90.54% from 2006 to 2014. There has been a shift of Nigerian debt profile from foreign to domestic dominance; made possible by listing on the Nigerian Stock Exchange on Feb 19, 2004, N 150bn Federal Government Bond. Strategic debt accumulation has not really being utilised as a political weapon at the Federal level in Nigeria possibly because most of the Leaders and the ruling party since 1999 never wish to relinquish power.
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