The Impact of Domestic Debt on Economic Growth in Nigeria (2007-2022)

The study examined the effect of macro-economic variables on economic growth in Nigeria between 1990-2022. Specifically, the paper examined the effect of Exchange rate on Economic growth in Nigeria and determined the effect of interest rate on Economic growth in Nigeria. The paper employed ex-facto research design, using secondary data and adopted SVAR model. The paper found out that interest rate has a significant effect on Economic growth (RGDP) in Nigeria, and found that exchange rate has a significant effect on Economic growth (RGDP) in Nigeria. The study concluded that macroeconomic variables has a significant effect on Economic growth in Nigeria. Based on the study’s findings and conclusions above, the following recommendations were made: the government should improve on her foreign reserves as an absolute measure that will stabilize exchange rate to boost economic environment for effective investment to thrive and contribute to gross domestic product in Nigeria, and interest rate is found to have increased the potentials of Economic growth in Nigeria. It is therefore important to note that since interest rate have significantly affected the Economic growth in Nigeria, the CBN should improve on discount rate to stabilize interest rate to boost economic environment for effective investment to thrive and contribute to gross domestic product in Nigeria.

This work investigated the impact of labour force participation on economic growth in Nigeria for the period 1990 to 2021 using annual time series data on real gross domestic product (RGDP), male labour force participation rate (MLFPR) and female labour force participation rate (FLFPR). The objectives are to examine the impact of male labour force participation rate (MLFPR) and female labour force participation rate (FLFPR) on economic growth in Nigeria and to ascertain the causality relationship between male labour force participation rate, female labour force participation rate, and economic growth in Nigeria using ARDL Bounds Testing methodology. The result indicated that male labour force participation rate (MLFPR) and female labour force participation rate (FLFPR) had statistically significant impact on economic growth in Nigeria in the short run. The result also revealed that, in the long run, male labour force participation rate (MLFPR) and female labour force participation rate (FLFPR) had statistically insignificant impact on economic growth in Nigeria. A uni-directional causality relationship is found between male labour force participation rate (MLFPR) and economic growth (RGDP) in Nigeria over the period covered with the causality running from economic growth to male labour force participation rate. The result further indicated that there is no significant causality relationship between female labour force participation rate (FLFPR) and economic growth in Nigeria over the period covered. The study therefore recommended that government should design active policy for male and female participation in labour force and seriously empower women to participate in labour force in Nigeria.

The study examined the effect of foreign aid and aid-institutional quality interaction on economic growth in Nigeria for the period (1981 - 2022) using FMOLS method. The result of the study shows that foreign aid (ODA) exerted positive but insignificant impact on economic growth in Nigeria, indicating that ODA is relevant to Nigeria’s economic growth but is not among the major drivers of economic growth in Nigeria. The aid-institutional quality interaction variable, the ODA interaction with corruption index (ODA*CPI), showed negative relationship with economic growth which suggests that weak institution, especially corruption, had constrained the positive effect of ODA on economic growth in Nigeria. The ODA absorptive capacity constraint (ODA2) had a negative and significant impact on economic growth which suggests the existence of inverted U-shape relationship between ODA and economic growth. The negative coefficient of absorptive capacity constraint of ODA shows that there is a critical level which beyond, further increase in ODA will impede economic growth. As for other variables, labour force (L), domestic capital (K), crude oil price (COP), financial deepening (FDP) and trade openness (TOP) had positive and significant relationship with economic growth (RGDP) in Nigeria. The coefficient of foreign direct investment (FDI) had a negative sign, implying that FDI had a negative impact on economic growth in Nigeria. It is recommended that there should be prudent utilization of ODA received, better and effective macroeconomic policies, improvement in the quality of governance and strengthening of relevant institutions to abate the problem of pervasive corruption in the country. Finally, aid fungibility should be avoided.

This study evaluated the impact of power sector expenditures on economic growth in Nigeria using a time series research design from 1986-2021. Secondary data were used and sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin December 2021. the Autoregressive Distributed Lagged (ARDL) and the Error Correction Model (ECM) were used to determine the relationship and impact of power sector expenditures on economic growth in Nigeria. The ndings found that there is a long-run, short-run and signicant impact on power sector expenditure indicators especially the power sector capital expenditure in Nigeria and power sector recurrent expenditure in Nigeria. This depicts that power sector expenditure is advantageous to economic growth in Nigeria. In other words, the leading drivers of economic growth in Nigeria are power sector capital expenditure in Nigeria and power sector recurrent expenditure in Nigeria. Therefore, the study recommended that the government should increase the power capital and recurrent expenditure through the annual budget in Nigeria to improve the quality and adequate supply of electricity and the level of economic growth and development in Nigeria.

The shortage of domestic savings needed for investments and the import requirements necessary for a certain production level and earnings from foreign exchange has made the inflow of foreign aid necessary to drive growth in a developing nation like Nigeria. The objective of this study therefore is to investigate the implication of foreign aid on economic growth in Nigeria for a 40- year time period spanning from 1981 to 2020. Time series data on gross domestic product, official development assistance and technical cooperation grant were sourced from the Central Bank of Nigeria statistical bulletin and the World Development Indicators database. The Unit root test, Co-integration test and Error Correction technique were employed as the main analytical tools in the study. The variables were stationary at first difference, according to the Augmented Dickey Fuller stationarity test. The results of the Johansen co-integration test indicated that the variables have a long-term association. The ECM result showed that ODA has a positive relationship with economic growth (GDP) in Nigeria. Also, TCG positively impacted economic growth in Nigeria for the period covered by the study. The impact of ODA and TCG were however not statistically significant. Hence, it was concluded that foreign aid did not significantly drive economic growth in Nigeria. Based on the empirical findings of this study, the following recommendations were made; government should ensure that the official development assistance received from international donors is channeled to developmental projects which should be monitored closely to ensure that they are efficiently utilized. Also, the inflow of technical grant should be encouraged to ensure human capital development and sustain growth in Nigeria. Finally, sound policies should be put in place to enable Nigeria transition from being a recipient of foreign aid to being a donor country.

This study examines the long and the short run linkage effects of government recurrent and capital expenditure on economic growth in Nigeria using annual data covering the period of 1985 to 2022. This study employs Autoregressive Distributed Lag (ARDL) model to examine the long run relationship existing among the variables. The ARDL long-run bounds test established the existence of long run effects of government recurrent and capital expenditure on economic growth in Nigeria. Specifically, the ARDL long run model test reveals that while government capital expenditure has a negative and statistically significant relationship with economic growth in Nigeria, government recurrent expenditure has a positive and significant relationship with economic growth in Nigeria. The ARDL Short-run bounds test reveals that it will take the speed of about one year and six months for a disequilibrium in the short-run to be corrected in the long-run. The study recommends the strategic channeling of government capital expenditures to the productive sector and for the provision of critical infrastructure that will boost growth. It also recommends the prudent management of recurrent expenditures for the optimal use of public funds.

Considering the enormous impact of poor standard of educational system in Nigeria over the years, the study investigated the effects of public education funding on economic growth in Nigeria from 1985 to 2019. The paper used secondary data sourced from both Central Bank of Nigeria Statistical Bulletin and World Bank’s Development Indicators 2019. The paper employed Auto-Regressive Distributed Lag co-integration, Error correction mechanism and granger-causality tests as technique for data analysis. The ARDL bound test co-integration results revealed that RRETE, RCETE and Inflation have positive relationship with Economic growth. However, RETE, SEDU and PRI have indirect influence on Economic growth in Nigeria. Statistically, only RRETE has a long run causal effect on economic growth. ARDL Error Correction Regression output showed that RETE and RCETE are significant at 10% level while PRI is significant at 5% level this indicates the existence of short run causal relationship with the establishment of ECM long run equilibrium adjustment speed. The causal results revealed unidirectional inference between SEDU and RETE, PRI and RETE, PRI and RRETE with no feedback effect. Therefore, the study recommended educational funding targeted at secondary and primary education system in order to acquire productive skills and knowledge to stimulate economic growth and development in Nigeria. There is need to meet the UNESCO funding ratio for both recurrent and capital expenditure on education sector.

The study investigated the effects of the level of global and local attacks against ships on economic development in Nigeria. It also examined the effects of volume of cargo pilfered in Nigeria ports as a result of insecurity on the economic growth in Nigeria. The study employed secondary data sourced from from the Nigerian ports authority, the National bureau for statistics (NBS) and the International Maritime Bureau (IMB) on the Gross Domestic Product (GDP), levels of pirate attacks against ships in local and global waters, and volume of cargo pilferages in ports. The multiple regression analysis method was used to analyze the dataset obtained using GDP as the dependent variable while global attacks, local attacks and volume of cargo pilfered were used as independent variables. It was found that the effect of maritime piracy and sea robbery on economic growth and development is expressed by the equation: GDPt = 1638944 + 5745.61GLOTAKSt – 34587.7LOTAKSt + 193.25VOCARPt. This implies that economic growth in Nigeria increase with increase in attacks against ships in global waters, it decreases with increase in attacks against ships in Nigerian maritime domain and increases with increase in volume of cargo pilfered from the ports. A unit increase in level of global attacks increases the GDP by 5745.61 units while a unit increase in local attacks against ships trading in Nigerian waters decreases the Gross Domestic Product (GDP) by 34587.7 units. Similarly, a unit increase in volume of cargo pilfered from the ports increase the GDP by 193.25 units. It concluded that maritime piracy and sea robbery attacks against ships have significant impact on economic growth and development in Nigeria.

Purpose. This study presents an evaluation of the effect of federal government expenditure on economic growth in Nigeria during the period 1986–2020. Economic growth in Nigeria over the years (precisely from 1986 when the Structural Adjustment Programme was introduced) is not in tandem with the magnificent rise in total government expenditure covering this period. The citizens have seen leadership in Nigeria as a failed litmus test, some have left the country to seek for “greener pastures” abroad. Specifically, this study examined the effect of recurrent and capital expenditure of the government on real gross domestic product, gross fixed capital formation, savings, and manufacturing capacity utilization. Results. The result of the analysis revealed that government recurrent expenditure has significant effect on real gross domestic product, gross fixed capital formation, and savings. Government recurrent expenditure is negatively related with real gross domestic product, gross fixed capital formation, savings, and manufacturing capacity utilization. Similarly, government capital has positive relationship with gross fixed capital formation and manufacturing capacity utilization, whereas it is negatively related with real gross domestic product and savings. Scientific novelty. The review of previous studies on economic growth is majorly measured using real gross domestic product. However, this study takes a new dimension by introducing three other variables: gross fixed capital formation, savings, and manufacturing capacity utilization which also reflect the level of growth in an economy. In addition, the application of the Auto-Regressive Distributive Lag (ARDL) model which takes into consideration of the different order of integration of time series data as against the Johansen co-integration that characterized previous studies in the Nigeria environment, will robustly help in determining the short run and long run effects of Federal Government expenditure on economic growth fundamentals in Nigeria. Practical value. This study therefore, is re-echoing the need for government to make capital expenditure her priority. By this, the government should allocate at least 50.0 % of her total expenditure on capital projects. The present-day practice of allocating only 16.6 % (based on year 2020 approved budget of the Federal Government) for capital expenditure will not to a great extent accelerate the pace of economic growth and development in Nigeria.

This work investigates the monetary policy transmission mechanisms and their efficacy in predicting economic growth in Nigeria using the ARDL methodology. Variables included in the model were growth rate of real domestic gross product (RGDP), M2 broad money supply definition, cash reserve ratio (CRR), nominal exchange rate (EXCR); inflation rate (INFL), interest rate and deposit money banks credit to the private sector (BCR). The unit root test using the ADF test revealed that all our variables were integrated at levels I (0). The study proceeded to estimate the ARDL bounds tests; the ARDL long run estimations; the diagnostic tests, normality and stability tests respectively. The critical findings from our result and analysis revealed that broad money supply (M2), exchange rate (EXCR), cash reserve ratio (CRR) and the rate of inflation (INFL) were the major monetary policy transmission mechanism predicting the level of economic growth in Nigeria. Likewise, the study identified interest rate (INTR) and deposit money banks credit to the private sector (BCR) as weak transmission variables driving economic growth and prices in Nigeria. The study concludes that the monetary policy transmission mechanisms have had a mixed bag in predicting economic growth in Nigeria. This conclusion was arrived based on the fact that the findings suggest that the negative impacts outweigh the positives, especially, as the critical variables like interest rate, credit to the private sectors and exchange rate depreciation plays a key role in driving economic growth. The monetary authority should be religious in seeing through monetary policies, especially, in maintaining consistency. Devaluation or depreciation of the naira also is not pro-growth in Nigeria and should be jettisoned, pending the diversification of our economy and improvements in our domestic productive capacities. Evidently, access to private sector credit at a lower interest should be pursued vigorously. Keywords: monetary policy, transmission mechanism, economic growth and devaluation DOI : 10.7176/RJFA/10-18-06 Publication date :September 30 th 2019

This paper interrogates the rationale behind federal government continued reliance on Keynesian’s fiscal policy prescriptions of deficit financing as a way of spurring sustained economic growth and development in Nigeria, especially when such ideology seems to contrast sharply with the realities of dwindling economic growth indices. In particular, this study investigates the extent both external debt and domestic debt impact on economic growth in Nigeria. Multiple regression method was adopted while Autoregressive distributed lag (ARDL) model was the main technique used in the analysis. The results of the ARDL model demonstrate that external debt (LEXD) and domestic debt (LDD) have a negative impact on LGDP. However, while external debt reveals a significant effect, domestic debt (LDD) has an insignificant impact on LGDP. Thus, the study recommends that government should discontinue the use of external debt to finance budget deficit in the economy, but look inward through aggressive internal revenue generation as well as embrace economic diversification policies, coupled with a drastic cut down on cost of governance in Nigeria.

This paper examines the impact of foreign aid on economic growth and poverty reduction in Nigeria, using the Autoregressive Distributed Lag (ARDL) technique for regression analysis. The study employs time series data from 1986 to 2020 to analyze the long-run and short-run relationship between foreign aid, economic growth in Nigeria. The study adopted the combined theories of economic growth of the Harrod-Domar Model, the Two-Gap Model and the Three- Gap Model in theoretical outlook. The data set is used to test the long-term relationship as well as the short-term relationship. The results show that foreign aid has a positive and significant impact on economic growth and poverty reduction in Nigeria in both the long-run and short run. The study concludes that foreign aid can be an effective tool for promoting economic growth and poverty reduction in Nigeria. The study recommended that in targeting aid towards infrastructure development, foreign aid can be used to fund infrastructure projects like building and upgrading roads, ports, and power plants to create jobs and increase economic activity. It also recommended investing in education and healthcare, foreign aid can be used to support education and healthcare initiatives, to improve the overall health and well-being of the population and increase productivity Economic-growth, Foreign aid, Poverty, Nigeria, Population, Three-Gap Model Two-Gap Model

This paper examines the impact of foreign aid on economic growth and poverty reduction in Nigeria, using the Autoregressive Distributed Lag (ARDL) technique for regression analysis. The study employs time series data from 1986 to 2020 to analyze the long-run and short-run relationship between foreign aid, economic growth in Nigeria. The study adopted the combined theories of economic growth of the Harrod-Domar Model, the Two-Gap Model and the Three- Gap Model in theoretical outlook. The data set is used to test the long-term relationship as well as the short-term relationship. The results show that foreign aid has a positive and significant impact on economic growth and poverty reduction in Nigeria in both the long-run and short run. The study concludes that foreign aid can be an effective tool for promoting economic growth and poverty reduction in Nigeria. The study recommended that in targeting aid towards infrastructure development, foreign aid can be used to fund infrastructure projects like building and upgrading roads, ports, and power plants to create jobs and increase economic activity. It also recommended investing in education and healthcare, foreign aid can be used to support education and healthcare initiatives, to improve the overall health and well-being of the population and increase productivity.

Purpose: The purpose of this study is to investigate the effect of sectoral utilization of foreign exchange and the policy implications for economic growth in Nigeria.
 Methodology: The methodology involved the use of annual time series data covering 1997 to 2022 for pre-diagnostic tests for unit roots which showed that the variables used in the study: economic growth (proxied by real gross domestic product), visible transactions, invisible transactions, treasury bill rate, and exchange rate, were stationary in the first difference. Hence, after first differencing the data, the Ordinary Least Squares (OLS) estimation method was used to estimate the model.
 Findings: The findings of the study showed that visible and invisible foreign exchange utilization valid for foreign exchange transactions, in addition to exchange rate and Treasury bill rate impacted positively and significantly on economic growth in Nigeria during the study period. The results of the study strengthened the theoretical basis for the use of relevant policies to grow economies generally, and that of Nigeria in particular.
 Unique contributor to theory, policy and practice: By implication, the governments at all tiers should endeavor to provide the enabling environment for greater availability and utilization of foreign exchange to further improve economic growth and sustainable development in Nigeria.

This work examined the comparative impact of fiscal policy and monetary policy on economic growth in Nigeria over the period 1981 to 2021 using annual time series data on real gross domestic product, broad money supply, government expenditure, total government revenue, and interest rate (lending rate). The objectives are to determine whether the fiscal policy or the monetary policy impacts more on economic growth in Nigeria and to ascertain the causality relationship between fiscal policy, monetary policy and economic growth in Nigeria over the period. The study employed ARDL Bounds Testing methodology in determining whether long run relationship exists between fiscal policy (proxy government expenditure and total government revenue), monetary policy (proxy broad money supply and interest rate (lending rate) and real gross domestic product. The result indicated that broad money supply representing monetary policy has positive relationship with and statistically significant impact on economic growth in Nigeria over the study period as indicated by its t-statistic and probability values of 6.436365 and 0.0000 respectively. Fiscal policy variable (government expenditure), on the other hand, has negative relationship with economic growth and statistically significant impact on economic growth in Nigeria as indicated by its t-statistic and probability values of -2.427968 and 0.0234 respectively. From the result, a change in money supply (monetary policy) affects economic growth positively while a change in Fiscal policy variable (government expenditure) affects economic growth negatively. Besides, the coefficient of monetary policy (0.457048) is greater than fiscal policy coefficient (-0.300554) and implies that monetary policy impacts more than fiscal policy impacts on economic growth in Nigeria. Therefore monetary policy does impact more than Fiscal policy on economic growth in Nigeria over the period studied. The result further indicated that there is no significant causality relationship between fiscal policy, monetary policy and economic growth in Nigeria over the period covered as indicated by the probability values of both fiscal and monetary policy variables employed and economic growth. The study therefore recommends that policy makers should focus more on monetary policy than fiscal policy so as to enhance economic growth since monetary policy has more concern with economic growth than fiscal policy. Keywords: Economic growth, fiscal policy, monetary policy, ARDL, Bound Test, Causality, Nigeria.