Debt In Nigeria Research Articles

Macroeconomic Effects of Public Debt in Nigeria

Macroeconomic Effects of Public Debt in Nigeria

Level of Economic Development and National Policies in Mexico and Nigeria (1970-2018): A Comparative Analysis of Growth and Institutions

The research compares Mexico and Nigeria's growth and development disparities using Sen and Collier's frameworks by examining various factors. It aims to propose policies on interest rates, FDI, external debt, government spending on health, education, and welfare. Results highlight positive impacts on Mexico's GNI from external debt, government spending, and FDI, and in Nigeria, all variables except interest rates positively affect GNI. Key recommendations include reducing Nigeria's debt by investing in bonds, using domestic debts and for both countries; enhancing welfare through Progresa, transparency in expenditure using online reporting, and infrastructure; boosting income and employment in Mexico with knowledge transfer, innovation, and transport improvements; and addressing violence by alleviating poverty through proposed subsidy programs and anti-corruption measures.

Effect of Public Debt on Economic Growth in Nigeria with or without Domestic Investment

The paper examines the effect of public debt on economic growth in Nigeria with or without domestic investment between 1981 and 2020 using a technique of Dynamic Least Square (DOLS). The findings of the study reveal that public debt in Nigeria retards economic growth through reduction in the level of investment. This indicates the possibility that the current levels of public debt in the Nigeria might not have been reducing the volume of growth but have the tendency to create a poorer macroeconomic and uncertain climate for investment. The implication is that the nonlinear relationship between debt and economic growth is a reality. It is suggested that there should be big push investment into all sectors of the economy that serve as engine of growth to the nation and whenever public debt is acquired, domestic investment must be given priority. Keywords: Effect, Public Debt, Economic Growth, Domestic Investment, Nigeria

Government Expenditure and Public Debt in Nigeria

Government Expenditure and Public Debt in Nigeria

Does public debt disrupt economic growth in Nigeria? A two-stage least squares approach

The impact of Nigeria's public debt on economic growth was investigated in this study. Additionally, it confirmed the validity of Nigeria's debt burden and crowding-out hypotheses. The time series data used ranged from 1981 to 2021. For analysis, the Two-Stage Least Squares and Toda Yamamoto Causality tests were employed. The findings contradicted the debt overhang effect hypothesis by showing that public debt had a positive and significant influence on economic growth. This proves that Nigeria's public debt has no adverse effects on the economic growth of the nation. Additionally, debt service has a detrimental effect on economic growth. This demonstrated that the crowding-out effect, often known as the crowding-out hypothesis, existed in Nigeria. Thus, servicing the national debt has a negative impact on Nigeria's economic expansion. The results of the public debt model, however, showed that trade openness and real gross domestic product had a favourable effect on public debt. A bidirectional relationship between public debt and economic growth was revealed by the findings of the causality test. The results also showed a one-way relationship between debt service and economic growth. As a result, the study implies that the government can simultaneously pursue its two policy goals of economic growth and public debt. Furthermore, decisions about debt repayment in Nigeria should be made in a way that promotes the growth of the economy. Nigeria should also improve institutional performance and boost its macroeconomic policy in the areas of inflation, foreign direct investment, trade, and exchange rates.

Role of Islamic Law in the Efficient Management of Debt in Nigeria

Role of Islamic Law in the Efficient Management of Debt in Nigeria

Public debt shocks and macroeconomic stabilization in Nigeria: A new Keynesian approach

The study examined the impact of public debt shocks on Nigeria’s macroeconomic stability. This study aimed to evaluate the role of increasing public debt on macroeconomic variables in Nigeria using a New Keynesian approach to evaluate the effect of both external and domestic debt on macroeconomic stability and the impact of debt service on revenue on Nigerian macroeconomic stability. The dynamic stochastic general equilibrium model was adopted as an analytical tool using the Bayesian approach in a Matlab R2021a in a Dynare 4.6.4 environment to determine the influence of public debt shock on macroeconomic stability in Nigeria. It was discovered that a positive relationship exists between output (economic growth) and foreign debt in Nigeria within the period under review. It was also found that debt service to revenue ratio, interest rate, and domestic debt have a negative relationship with output (economic growth). As a result, an increase in external debt will positively impact output (economic growth). In contrast, an increase in the debt service to revenue ratio, interest rate, and domestic debt will have a negative transmission effect on Nigeria’s macroeconomic stability. High debt service would impede growth by reducing public resources and productive investment that would otherwise be used to encourage growth. According to this result, external debt is the best option for capital projects rather than domestic debt, which is likely to affect the business environment negatively. This study is practically relevant to government, investors, scholars, and policymakers, especially those around fiscal policy, to guide them in advising the government on where to borrow for its capital projects when needed

Analyzing the Signaling Effect of Public Debt to Foreign Investment in Nigeria

This study examines the effects of public debt on foreign investment performance in Nigeria. This was aimed at ascertaining how DPD for domestic public debt, FDB for external public debt, and DS is for fiscal deficit have stimulate the foreign direct investment (FDI) performance in Nigeria for the period 2000 to 2021. Historical data was collated and estimated employing the ARDL- based Ordinary Least Squares (OLS) technique. The empirical results indicate that foreign direct investment responded to domestic debt and debt servicing negatively, but positively to foreign public debt in Nigeria. On the basis of the findings of this study, the following recommendations are made. The government should regularly review their domestic debt policy for reduction, policies that promote more foreign debt be adopted as against domestic debt and government should invest debt on income-generating ventures to reduce the burden of servicing.

Public Debt Management and Economic Growth: A Comparative Analysis of Pre-Covid 19 and Post-Covid 19 Pandemic

This study examine the comparative analysis of pre-COVID-19 and Post COVID -19 debt management on gross domestic product using external debt and servicing debt in Nigeria. Using data set from 2016-2021, the study adopted E x Post Facto research design. Data were extracted from Central Bank of Nigeria (CBN) Statistical Bulletin and World Bank Statistical Bulletin. The inferential statistics of the data was conducted with regression analysis via SPSS statistical software. Based on the result shows that pre COVID-19 pandemic characterized with higher economic growth, debt servicing and debt borrowing when compared with the situation after the pandemic in Nigeria. In addition, the study suggested that the government should restructure and consolidate discretionary spending to free up resources to fund the economic impact related to productivity.

External Debt and Macroeconomic Indicators: Time Series Evidence from Nigeria

This study investigated the relationship between external debt and macroeconomic indicators in Nigeria. The objective was to investigate the effect of external debt on Nigerian macroeconomic indicators. The study used of time series data sourced from Central Bank of Nigerian statistical bulletin. Data were analysed using Statistical Package for Social Sciences. Macroeconomic indicators were proxy by real gross domestic product, inflation rate, unemployment rate and balance of payment while external debt was proxy by Nigerian external debt to London club of creditors, multilateral club of creditors, Paris club of creditors, promissory notes and external debt servicing. Ordinary least square method with the aid of statistical package for social sciences was used as data analysis method. The study found 71.3 percent while the R-square is 66.3 percent. External debt variables explained 68.6 percent variation on the dependent variable which is balance of payment. However, the beta coefficient of the variables found that all the independent variables have positive but insignificant effect on the dependent variable which is balance of payment, the study found that external debt explained 77.1 percent variation on Nigerian unemployment rate the beta coefficient of the variable shows that all the independent variables have positive relationship except Nigerian external debt with London club of creditors and found that 78.4 percent variation on Nigerian inflation rate while the coefficient shows that external debt with multilateral club, Paris club and Promissory note have negative relationship with Nigerian inflation rate while debt servicing and Nigerian external debt with London club of creditors have positive effect on Nigerian inflation rate. The study concludes that external debt has significant effect with Nigerian macroeconomic indicators. We recommend that external debt in Nigeria should be well utilized for better macroeconomic indicators.

The Growth Effect of External Debt in Nigeria: Does Structural Break Matters?

The volatility in crude oil price in the global market has continuously heightened fiscal deficits in Nigeria, a net exporter of crude oil. Consequently, successive governments have often resorted to external borrowing to augment the available fiscal revenue. This has implications for economic growth. Therefore, this study evaluated the growth effect of external debt and accounted for structural break in the external debt-growth nexus in Nigeria. Annual data spanning 1981-2020 were sourced from global databases and analysed using the dynamic ordinary least square (DOLS) estimator. The result showed that external debt has growth-inhibiting effects on the Nigerian economy and that structural break matter in the analysis of the growth effect of external debt in Nigeria. The results imply that Nigeria needs to lower its external debt due to the high cost of debt servicing that accompany such debt while also improving the revenue-generating ventures in the country.

The macroeconomic fluctuations, taxation, and economic performance while controlling for public debt in Nigeria

The macroeconomic fluctuations, taxation, and economic performance while controlling for public debt in Nigeria

Determinants of External, Domestic, and Total Public Debt in Nigeria: The Role of Conflict, Arms Imports, and Military Expenditure

ABSTRACT Nigeria’s external and domestic debt have been rising very rapidly in recent years despite the crushing weight of debt burden that almost crippled its economy in previous decades. This study examines the likely determinants of public debt in Nigeria over the period 1970–2020 with a focus on the effects of armed conflict, arms imports, and military spending. Unlike most previous studies that focus only on external debt, this study employs the three separate measures of public debt, namely, government gross debt, external debt, and domestic debt. In addition to being more applicable to the case of Nigeria, this also allows us to investigate whether the drivers of public debt vary with the measure of debt used. Employing the ARDL approach to cointegration and a number of robustness checks, findings suggest that whereas conflict, arms imports, and military spending have statistically positive effects on external debt, they do not have a significant effect on domestic debt. Conflict and arms import have positive effects on gross government debt which is unsurprising given that gross debt includes foreign currency denominated debt. Policy recommendations based upon these findings are discussed.

An assessment of the impact of public debts on development in Nigeria (2003-2020)

This study assessed the impact of public debt on development of Nigeria. It specifically investigatedthe relationship between human development index, per capital income, growth rate and public debt inNigeria from 2003 to 2020. This study adopted quantitative research design. Relevant data regarding thevariable’s under-study were extracted from the Debt Management Office (DMO-2020) and UNESCOInstitute of Statistics (2020) while regression model was used to analyze the data. The study revealedamong other things that; there is presence of co-integration (long-run relationship) among the variablesin the model. The t-statistics of -2.297997 with 0.0388 p-value implies negative and significant relationshipexists between foreign debt and human development index, t-statistics of 2.557340 with 0.0239p-values implies positive and significant relationship exists between foreign debt and per capital incomeand also t-statistics of -0.658730 with p-value of 0.5216 implies negative and insignificant relationshipexistence between foreign debt and growth rate. The overall result of the f-statistics of 4.109504 withProb.(F-statistic) of0.029617 shows that all the explanatory variables jointly have significant impact onforeign debt both in the short and long run. The study concluded that there is significant relationshipbetween public debt and development in Nigeria, depending on the variable of interest. Likewise, thestudy recommended among other things that government should ensure efficiency and effectiveness inthe public debt management due to the negative and significant influence of human development indexon development both in the long run and short run, also the negative and insignificant influence offoreign debt on development in Nigeria which is a pure indication of poor public debt management inthe country. Also, the component governments in Nigeria should reduce it public borrowing as it has asignificant inverse effect on the development of the country in the long run.Key words: Public debt, Per capital income, Human Development Index, Growth rate and Development.

The effects of financial inclusion on external debt in Africa

This study investigates the effect of financial inclusion on external debt in Nigeria, South Africa, Kenya, and Egypt, using annual time series data from 1990 to 2020. The data was sourced from the World Bank. The variables used in the study are market capitalization of listed domestic companies as a percentage of GDP, external debt stock, current account balance as a percentage of GDP, broad money (M3) as a percentage of GDP, and gross fixed capital formation as a percentage of GDP. The unit root test for stationarity was done using Augmented Dickey Fuller unit root test. The result of the unit root test informed the choice of Long Run Form and Bounds test, and Johansen Cointegration techniques for investigating long run relationships. The result showed the presence of a long run relationship between financial inclusion and external debt for Nigeria, South Africa, Kenya, and Egypt. The result also showed a positive relationship between financial inclusion and external debt. This is because a strong financial system will increase access to external debt because of good credit ratings. Granger causality results showed unidirectional causality from financial inclusion to external debt for only Nigeria and South Africa. More success in economic development can be achieved by focusing on financial inclusion strategies in Africa which would translate into numerous outcomes which include increasing domestic resources and increasing access to external debt with market competitive interest rates.

Excessive Internal Borrowings and Debt Management: Implications on the Nigerian Economy

This study empirically reviewed the implications of excessive internal borrowing and debt management with particular emphasis on Nigeria. The study covered the period from 2000 to 2020. The study examined the concept, growth, and causes of Nigeria’s domestic debt problem. It went further to study the strategies employed by government in managing domestic debt in Nigeria as well as the dominant factors that hampered domestic debt management which are poor management of borrowed funds, high cost of servicing domestic debt, excessive borrowings and rising budget deficit. Data were collected majorly from secondary source which includes Central Bank of Nigeria statistical bulletin, Debt Management Office publications and relevant journals and textbooks on financial system. Hypothesis were formulated, examining the impact of internal borrowings on Nigeria’s economy, it’s relationship with domestic debt servicing and its effect on rising budget deficit, and were tested and analyzed with the Regression analysis, correlation analysis, and the probability significance value using the Statistical Package for Social Science (SPSS) version 17. After the analysis, the work revealed that internal borrowings have affected the growth of the economy negatively, a positive relationship exists between domestic debt servicing and internal borrowings and that rising budget deficit has a negative impact on domestic debt. Based on these findings, the study recommends among others that the Federal Government should lay down well considered guidelines for internal loan, defining the purpose, duration, negotiation fee and conditions under which it can approve and guarantee a loan. Also limit domestic borrowings and mobilize untapped domestic resources as well as curb corruption in the country as borrowed funds are either misapplied or embezzled. If the Government and Debt Management Office employ the recommendations of this research, it would go a long way in boosting economic growth and development and to a positive extent ensure improvement in the overall economy of Nigeria.

Impact of COVID-19 on External Debt in Nigeria

Impact of COVID-19 on External Debt in Nigeria

An Empirical Evidence of the Impact of Government Tax Revenue on Nigerian Public Debt

Objective The major objective of this paper is to examine the existence of a mutual consen-sus on the effect of tax revenue and non-tax revenue on public debt in Nigeria.Design/methodology – The study uses documentary research design. Data was collect-ed using secondary method of data collection from Debt Management office and Bureau of statistics and Central Bank of Nigeria statistical bulletin data bank. Ordinary Least Square Multi regression model was used in analyzing the dataResults – The research found out that there is a negative an insignificant relationship be-tween tax revenue, non-tax revenue and interest rate in relation to Nigerian public debt. Moreover, the paper found out that exchange rate and population rate had significant and positive relationship with Nigerian public debt.Limitation/Suggestion – The implication of the study is that, the contribution of tax revenue to the reduction of public debt is minimal as could be shown from the results. While, non-tax revenue contributed more than tax revenue in public debt reduction in Nigeria. In addition, increase in exchange rate, and population rate contributed more to increase in pub-lic debt, while, an increase in interest rate does not increase public debt but rather it discour-ages the government from collecting more debt and push the government to go for other rev-enue sources that where not assessed. The study recommended that; government should harness untapped taxes to increase tax revenue generation to pay interest on loan and princi-pal. Must of the information at the researcher disposal used for the study was for 15 years, from 2003 to 2018. Thus, studies need to be conducted involving more year like from 20 years upward to see whether it will change the result.Novelty/Originality – The originality of this research lies on the government inability to generate enough tax revenue and non-tax revenue to meet expenditure without collecting debt. This is because collection of debt always leads to frequent increase in debt burden in Nigeria. Fewer or no one has carried out a careful analysis of the relationship between tax and non-tax revenue against total debt in Nigeria.

Exploring the spatial distribution of domestic debt in Nigeria

Exploring the spatial distribution of domestic debt in Nigeria

Effect Of Tax Revenue On Foreign Debt In Nigeria

Debt is a salvaging factor to cushion the effect of recurrent budget deficit, a connecting bridge for the gap between revenue and expenditure as well as means of financing sustainable growth in an economy.