Debt Profile Research Articles

Sovereign Debt and Climate Change in Argentina – The Catalytic Role of the IMF

Abstract This article studies the interdependence between Argentina’s public over-indebtedness and climate change. It addresses the following questions: What type of productive model does the Argentine public debt profile promote, and what is its impact on climate change? In a debt-servicing scheme marked by fiscal consolidation, which strongly conditions the state budget, what public funds are available to invest in adaptation and mitigation? Finally, what is the role of the IMF in this fiscal-environmental scheme? The article first presents the international commitments of the Argentine State in the face of climate change and the estimated fiscal cost of implementing the necessary adaptation and mitigation measures. It then describes the situation of Argentina’s debt in historical perspective up to the present and explains how the external debt has been determining the productive specialization of the national economy, which seeks to boost the country’s primary export capacity, particularly agribusiness, the fossil fuel sector, and open-pit metalliferous mining. It also analyzes the role of the IMF in Argentina as a catalytic actor in the climate crisis, describing the IMF’s centrality in the national economy, its economic-environmental policy on the production pattern that accelerates climate change, and the incidence of this phenomenon in Argentina.

Impact of increasing debt profile on economic growth in Nigeria

Impact of increasing debt profile on economic growth in Nigeria

Understanding the Nigerian Domestic Debt

The portion of a country's overall public debt that is owed to domestic lenders is known as its internal or domestic debt. The public debt profile of a nation is comprised of its external and domestic debt stock. This article provides insights into the various components and major holders of the country's domestic debt. The Country’s domestic debt profile, which is currently on the rise, has led to numerous challenges in the economy such as debt overhang, higher debt servicing costs, unstable currency rates, and crowding out impacts on the private sector, among others. Therefore, measures have been recommended to curtail the level of increasing borrowings. The goal of setting up a distinct public debt management agency such as the Debt Management Office (DMO) by the government was to continuously accomplish the benefits of cautiously sourcing financing to cover for government deficits at reasonable rates and with manageable medium to long-term risks.

Block Chain Technology, Cryptocurrency and Revenue Generation: A Systematic Review

The huge debt profile of Nigerian government dictates the need to look for alternative means of financing. This paper explored how the Nigerian government can increase its revenue through block chain technology and crypto currency. The study adopted a qualitative research approach by reviewing related literatures. The study concluded that even though crypto currency was not recognized as legal tender in Nigeria, the government can take advantage of the emerging and growing market of crypto currency by taxing it, this study recognized the fact that Nigeria government just enacted an act imposing 10% capital gain tax on digital assets including crypto currency, the government can still do better. It therefore recommended that Nigeria government should adopt the USA model of taxing crypto currency whereby not only capital gain tax would be charged, but also income tax and value added tax; thereby increasing the total revenue generated from this avenue.

Effect of Increasing Government Debt Profile on Economic Prosperity of Nigeria

The study aimed at assessing the effect of increasing government debt profile on economic prosperity of Nigeria. Specifically, the study examined the extent that Gross Domestic Product (GDP) was affected, during the period of study, by rising domestic debt, external debt, and cost of borrowing in Nigeria. The data for analysis were sourced principally from CBN Bulletins and Debt Management Office. The null hypotheses that domestic debt, external debt, and cost of borrowing do not significantly affect Gross Domestic Product, were tested through a multiple regression analysis. The findings indicate that Domestic Debt has a positive and significant effect on Gross Domestic Product in Nigeria with coefficient of 1.005965 and p-value of 0.0000. Furthermore, the external debt stock reveals a negative and non-significant effect on Gross Domestic Product with coefficient of -0.083963 and p-value of 0.5909, while Cost of Borrowing exposes a positive and non-significant effect on Gross Domestic Product in Nigeria with coefficient of 0.038835 and p-value of 0.7589. The R-squared (Coefficient of Determination) indicates that 98% of the variations in Gross Domestic Product in Nigeria could be explained by changes in Domestic Debt, External Debt and Cost of Borrowing. The implication of the findings is that economic prosperity is facilitated by Domestic Borrowing while External Borrowing must be avoided where possible because of its’ negative effect on GDP. In addition, the effect of Cost of Borrowing on GDP is purely dependent on the appropriateness of use of borrowed fund. The study recommended that government should first explore internal sources of fund whenever borrowing is unavoidable in preference to foreign/external sources, reduce or avoid external borrowing and properly apply the borrowed fund for its economy to prosper.

Does public debt matter for human capital development? Evidence from Nigeria

An inquiry into the impact of external and domestic borrowings is considered timely for Nigeria, given the growing public debt profile amid deteriorating human capital development. Using data from 1990 to 2021, the study estimates the effects of domestic and external debts on Nigeria's human capital development. The study employed the fully modified ordinary least squares and canonical cointegration regression as the main estimation technique and the robustness check, respectively. The study discovered that domestic and external debt, economic growth and debt servicing exert positive and significant influence on human capital development in Nigeria while environmental pollution has an inverse and significant impact on human capital development in Nigeria. Premised on the outcomes, policy suggestions aimed at enhancing human capital development in Nigeria have been put forward.

Energy efficiency investment in a developing economy: financial development and debt status implication

PurposeThis study aims to assess financial development and debt status impact on energy efficiency in Nigeria as a developing economy.Design/methodology/approachThis study combined the autoregressive distributed lag (ARDL), fully modified ordinary least squares and canonical cointegration regression analytical methods to estimate the parameters for energy efficiency policy recommendations. Secondary data between 1990 and 2020 were used for the analysis.FindingsThe result confirms the long-run nexus between energy efficiency, financial development and total debt stock. Furthermore, the ARDL estimates for this study’s key variables show that financial development promotes energy efficiency in the short run but hinders long-run energy efficiency. Total debt stock limits energy efficiency in Nigeria in short- and long-run periods.Research limitations/implicationsThe limitation of this study is that the scope is limited to Nigeria as a developing economy. The need to support energy efficiency projects is a global call requiring cross-country analysis. Despite this study’s focus on Nigeria, it provides useful insights that can guide energy efficiency policy through the financial sector and debt management.Practical implicationsThe financial sector must ensure the availability of long-term credit facilities to clean energy investors. The government must maintain a sustainable debt profile to pave the way for capital expenditure on clean energy projects that promote energy efficiency.Originality/valueThe environmental consequences of energy intensity are being felt globally, with the developing countries most vulnerable. The cheapest way to curb these consequences is to promote energy efficiency to reduce the disastrous effect. Driving energy efficiency requires investment in energy-efficient technology but the challenge for developing economies, i.e. Nigeria’s funding, remains challenging amid a blotted debt profile. This becomes crucial to investigate how financial sector development and debt management can accelerate energy-efficient investments in Nigeria.

Fiscal Policy and Unemployment Nexus in Nigeria: An Empirical Analysis (1990–2021)

ABSTRACT: This study assessed the fiscal policy and unemployment nexus in Nigeria using time series data covering 1990 to 2021. Economic downturn, poor living standard, inadequate employment generation and increasing unemployment rate are sources of concern and worry. Job creation seems not to be getting the needed attention in the scheme of economic policies in Nigeria. The proxies for fiscal policy were: government capital expenditure (GCE), government revenue expenditure (GRE), government external debt (GED) and government total revenue (GTR), while that for unemployment was the unemployment rate. Specifically, this sought to examine the nexus between GCE and unemployment rate, GRE and unemployment rate, GED and unemployment rate, and GTR and unemployment rate. The ex-post-facto research design was used while the hypotheses were tested at 5% significance level. The time series data obtained from the Central Bank of Nigeria statistical bulletin was analyzed using the OLS technique. The test results showed that: GCE had a coefficient of 3.84 and a probability of 0.9893; GRE had -0.000481 coefficient and a probability of 0.6365; GED had 0.000584 coefficient and a probability of 0.1292 while GTR had 0.002070 coefficient and a probability of 0.0000. The probability f-statistic value of 0.000000 showed that proxies for fiscal policy are jointly significant to the unemployment rate. The adjusted R2 and Durbin-Watson values were 86% and 1.798125 respectively. It was recommended that the federal government should: (1) apply her capital expenditure properly and direct it to sectors that will help create more jobs and reduce unemployment rate, (2) make her recurrent expenditure to be supportive of the various government infrastructures, (3) drastically reduce her growing and high debt profile without commensurate job opportunities, (4) use her revenue to drive the economy instead of being applied on non-productive, white elephant projects or misappropriated.

A Quantitative Analysis of the Belt and Road Initiative

Purpose: The article aims to examine the effects of the Belt and Road Project (BRI) of China and its recent developments.
 Methodology: It does this by analyzing the effects Chinese investments have had on their largest beneficiaries. The article considers several factors such as transport, energy, and debt profiles of the countries after receiving aid under BRI.
 Findings: Through our analysis, we have found that the project is by far the most secure investment developing countries might have especially considering the diminishing aid of the USA and European countries. It is largely beneficial for both China and the beneficiaries encouraging economic growth. We have made our conclusions based on data reported through various research articles both domestic and international. These include but are not limited to papers from the SAIS-CARI website, the American Enterprise Institute (AEI), the World Bank, and the Boston University Energy Database.
 Recommendations: We recommend that in the future studies should be further conducted on the progress of BRI projects that have been started or planned in the future as well as the effects previous long-term investments are currently having on beneficiaries. Some research should also be conducted comparing the effectiveness of loans from the US and European countries when compared with Chinese counterparts

National debt management and business sustainability in Africa's largest economy: A focus on the private sector.

In many developing economies, high and increasing public debt profile constitutes an essential means of financial risk. An appropriate debt management is germane for survival of business and good international reputation though its effect on private sector credit mobilization had been seldomly investigated. This study seeks to know whether strategic debt management approach exacts a significant effect on the Nigerian private sector and Africa at large resulting to higher credit availability for sustainable enterprise establishment. The study used a time-series observation spanning from 1981-2021. The method of data analysis employed the unit root test for stationarity. Johansen cointegration and vector error correction approach. The result of the unit root test indicates the series were all stationary after first difference and thus were integrated of order1. The Johansen cointegration test support the existence of a cointegrating series between the private credit and its determinants. More empirical evidence from the study shows that proper debt management and increase revenue generation through net taxes on products accounted for 0.93 and 1.32% increase in private sector credit mobilization, while total external debt stock was responsible for a significant negative influence of 0.60% on private sector credit mobilization. The study recommends that the government should always be proactive in their strategic and innovative approach to debt management, revenue generation and sources of funds. This will help not only to avoid crowding out of the private sector but will enhance adequate credit mobilization for effective operations of the private sector.

Public Debt and Exchange Rate Stability in Nigeria: An Empirical Analysis

This study examined public debt and its effect on exchange rate stability in Nigeria from 1980 to 2019. The data were subjected to statistical analysis using vector autoregression model. Using data on external and domestic debt servicing ratio to total debt stock, the findings showed no significant relationship between public debt and exchange rate stability in Nigeria within the period, likewise for ratio of external debt servicing to total external debt stock and exchange rate. Finally, domestic debt servicing had no significant relationship with exchange rate. The study concluded that as Nigeria increases external debt servicing, domestic prices increases and this also affects exchange negatively. It is recommended that concerted effort be intensified towards decreasing the level of external debt profile of Nigeria which will invariably decrease external debt servicing. Also, government should intensify revenue drive through exploring other viable sources that do not have repayment plan rather than relying on augmenting yearly budget through public debt accumulation. Keywords: Public Debt, Exchange Rate, Economic Stability, External Debt Servicing Ratio, Nigeria Economy.

Budget Deficit and Economic Growth in Nigeria: A Further Assessment

As revenue under-performs while the debt profile keeps increasing, the government of Nigeria targets fiscal viability through appropriation. However, in response to various fiscal operations regarding the deficit and the growth in the country, several studies have examined the relationship and come up with divergent findings. On this premise, and while building on previous effort, the objective of this paper is to assess the effect of budget deficit on economic growth over the period 1981-2021 in Nigeria. On the assumption that the economic growth is influenced by other factors aside the main sources of budget deficit, the individual average effect of FDI, ODA, and the public investment was also examined. The pre-estimation diagnostics used the ADF, PP, KPSS method, as well as, Bai-Perron multiple structural break methodology. Moreover, following the unit-root results, the ARDL technique was employed for model estimation. Consequently, whereas a two-way causal relation was established between the economic growth and FDI, a one-way causality was rather found to run from each of budget deficit, ODA, and a public investment to economic growth. Furthermore, the analyses revealed that public investment positively affects the economic growth in both short- and long-run while the budget deficit positively affects in the short-run as against negatively in the long-run. Thus, the government is advised to intensify efforts at boosting public investment to help augment economic growth as the budget deficit is negatively effective in the long-run.

Religious affiliation and debt among U.S. households

Religion has been shown to have both a direct and indirect role in shaping personal values, especially pertaining to money and wealth accumulation. Existing research establishes a strong relationship between religious affiliation and wealth attainment. However, previous scholarship has largely ignored the link between religious affiliation and debt, an important yet overlooked indicator of total net worth. To address this gap, we utilize data from the 2017 wave of the Panel Study of Income Dynamics (PSID) and examine how religious affiliation is associated with two forms of household debt: credit card and mortgage debt. Findings from a series of logistic regression models indicate that Black Protestants have the lowest rates of both credit card and mortgage debt and Hispanic/Latinx Catholics have comparably low rates of credit card debt relative to Conservative Protestants. KHB decomposition analyses reveal that race/ethnicity explain some of the relationship between a Black Protestant or Hispanic/Latinx Catholic religious affiliation and household debt. While our study is the first to document the link between religious affiliation and debt profiles of Americans, we would encourage future research to explore how other elements of religiosity—long acknowledged by sociologists to affect wealth and social status—influence different types of debt accumulation in nuanced and meaningful ways.

The Story Behind "London" (Loan Dito, Loan Doon): Exploring Teachers' Expenditure Patterns and Debt Profile

The Story Behind "London" (Loan Dito, Loan Doon): Exploring Teachers' Expenditure Patterns and Debt Profile

Corporate Debt Profile And Financial Performance Of Listed Consumer Goods Firms In Nigeria

This study examined the connectivity between corporate debt profile and financial performance of consumer goods firms in Nigeria. The corporate debt profile is captured with short term debt, long term debt and total debt while the outcome variables is capture with earnings per share and Tobin’s Q. Expo-facto design was adopted and covered 16 listed consumer goods firms in Nigeria based on the availability of data spanning from 2011 to 2020. Descriptive statistics were used to describe the variables of the study while the inferential statistics cover Pearson correlation and panel regression (random and fixed effect estimations) to analyze the proposed hypotheses of the study. Firstly, it was discovered that short- and long-term debt profile have a negative insignificant effect on financial performance captured with earnings per share of listed consumer goods firms in Nigeria to the tunes of -4.848905 (p=0.655>0.05) for short term debt and -6.150678 (p=0.785>0.05) for long term debt. Also, it was discovered that total debt profile has a positive significant effect on earnings per share of listed consumer goods firms in Nigeria with the coefficient and probability values of 4.735095 and 0.004 respectively. From the findings of this study, it was concluded that there is a statistical relationship between corporate debt profile and financial performance of listed consumer goods firms in Nigeria. Thus, it was recommended that the management of the listed consumer goods firms should maximize the functions of the risk committee formed to measure the risks involved in debt financing.

Natural resource rents and public debts nexus in African resource-rich and most indebted nations: Issues with aggregation bias

The relationship between natural resource of a country and its public debt profile has been a point of contention. Due to credit limits, countries endowed with natural resources employ their supposed resource huge windfalls as collateral. As a result, they are unable to settle their loans during these resource price fluctuations, particularly when the price lowers. Those countries who failed to implement adequate policies to address the commodity price boom-bust cycle suffer the consequences of the debt overhang, stifling their search for economic progress and trapping them in debt. In addition, aggregation bias, which can lead to incorrect estimation of aggregate relationships and mislead policymakers, is also a concern with aggregate estimations. The long-run relationship between total natural resource rents and public debt among the top African countries endowed with natural resources as well as the most indebted is examined. The study also makes efforts to determine whether or not aggregation bias exists. Trade openness, GDP per capita, and unemployment are among the other control variables included in the public debt model based on theoretical underpinning. The findings of a robust empirical estimation show that the relationship is negative at the aggregate level but positive at the disaggregated level, implying that the estimation of the public debt-resource rent relationship at the aggregate level is prone to aggregation bias. As a result, governments of resource-rich countries should engage in responsible borrowing and prudent fiscal management to minimize debt overhang. On the subject of estimating aggregation bias, policy could be drawn as follows: aggregation bias may lead to an incorrect total debt-resource rents postulation where policymakers may be misled by the incorrect evidence, resulting in poor resource-debt policies. Therefore, while formulating fiscal and growth strategies, policymakers should examine the resource-debt nexus at both the aggregate and country level.

Effect of Fiscal Policy on Poverty in Nigeria

The study investigated the effect of fiscal policy on poverty in Nigeria. The study covered 35-year period, spanning from 1986 to 2020 being a liberalized era in Nigerian economy. Fiscal policy being the explanatory variables, was disaggregated into federal government retained revenue (FRR), government capital expenditure (GCE), government recurrent expenditure (GRE),non-oil revenue (NOR), and public debt (PD). Poverty index as a dependent variable, being the unit measure for change in the poverty rate was used as proxy for poverty. Diagnostics test employed were, descriptive statistics to measure the mean, standard deviation, kurtosis and skewness as well as the Jarque-Bera statistics of the variables, while Augmented Dickey-Fuller unit root test was used to test for the stationarity of the data and Autoregressive distributive lag co-integration was employed to test for long-run relationship existing among the variables. Autoregressive distributive lag (ARDL) was used for the analysis since there was a long run relationship existing among the variables and Granger causality test was also employed to measure the directional relationship of the variables under study. The unit root test result showed that all the variables studied were stationary at first difference except NOR and FRR which were stationary at level, and co-integration result showed that fiscal policy has a significant long run relationship with poverty in Nigeria. The ARDL result showed that non-oil revenue showed initial negative government retained revenue but started effect of -3.298345 Lag 3, and then consistent positive effects 6.062662 Lag 4 through the short run periods. The federal government retained revenue showed initial negative effect of -3.739652 Lag 2followed by positive effect of 0.390469 Lag 3 and a return on positive effect of 6.249618 Lag 4 within the short run period. The government capital expenditure had similar trend as the federal retained revenue with a negative effect of -6.786381 in the initial period and first lag and then swung between positive and negative effects within the short run period, while the government recurrent expenditure started out with three year lagged period positive effects of 3.069591, 5.9766088, & 4.406814 but ended with negative effect of -7.978000. It was only the public debt profile that out rightly showed negative effect. Public debt has initial negative effect of -1.323569 and positive effect of 3.415523 Lag 3on the short run. Granger causality showed that non-oil revenue and public debt had causal effects on poverty reduction while federal government retained revenue, capital expenditure and recurrent expenditure do not have causal relationship with poverty reduction in Nigeria. The study concludes that fiscal policy with adjusted R2 of 0.993059 (99%) and p. value of 0.006425 has a significant effect on poverty in Nigeria. It was recommended that revenue and expenditure be increased while public debt be minimized in order to reduce poverty in Nigeria.

Debt Crisis and Nigerian Economy: An Assessment of the Buhari Administration (2015-2021)

External debt or recourse to loan borrowing is an effective measure providing alternative funding to augment limited monetary resources of a country in her quest for economic development. This loan, when appropriately used, advance infrastructural development that brings great dividend to the citizens but a departure from this put pressure on the economy which might lead to economy doldrums. Therefore, the aim is to examine if continuous loan actually generate economy buoyancy
 The study use qualitative analysis. Hence, it adopts a case-study research design approach. Primary data were generated from interviews with experts in the field of debt management and researchers in the area of political economy. Also, secondary data such as; journals, articles, books, library websites, newspapers, theses and dissertation and Debt Data documented by the Debt Management Office (DMO) available for a seven-year period (2015-2021).
 The paper found out that mismanagement and misappropriation of borrowed funds are the bane of development in Nigeria. Also, government neglect to economy diversification has made recourse to loan taking desirable as a source of alternative revenue for the country.
 Therefore, it was recommended that better debt policies to restructure and checkmate debt profile in Nigeria should be instituted while diversification of the economy will address the debt-to-revenue ratio impact of borrowing.

EXTERNAL DEBT AND AGRICULTURAL PRODUCTION IN NIGERIA

The motivation for this paper stems from the rising debt profile of Nigeria, especially the foreign component, and its implication on growth prospects. In that regards, the study sought to establish the linkages between external debt and growth in productivity, specifically focusing on the agricultural sector. The study thus analyzed the relationship between external debt and Nigeria's agricultural production from 2006 to 2021 using secondary data obtained from the Central Bank of Nigeria (CBN) statistical bulletin and the World Development Indicators (WDI). ADF unit root test and the (ARDL) bound testing approach to cointegration were utilized, to achieve the objectives of the study. The parameters displayed a long-term association in both the short and long - run, according to empirical results, which demonstrated that the variables were cointegrated. External debt stock (EDS) and agricultural production, as assessed by agriculture gross domestic product (AGDP), had a substantial positive association, indicating that EDS positively impacted agricultural growth and that higher EDS accelerated agricultural growth over time. To be precise, a rise in EDS of 1% produced an increase in AGDP of 0.14%. Euro bond stock and bilateral loans also revealed positive relationships while External Debt Service Payment and Multilateral loans revealed negative relationships with AGDP. According to this research, the government must consider the strategy of diversifying its economy via agricultural output seriously. To lessen the cost and unfavorable effects of an excessive reliance on foreign exchange from oil and its price volatility, it is necessary to diversify the sources of external debt servicing, particularly in the non-oil sector including agriculture, mining, industry, and industrial production.
 Keywords: Debt, Agriculture, Loans, Output, Nigeria.

THE RELATIVE IMPACT OF MONETARY POLICY AND FISCAL POLICY ON GROSS DOMESTIC PRODUCT IN NIGERIA

The Nigerian economy has been frontally constrained by unsteady GDP growth rates with episodes of recession, and other unimpressive socio-political and economic indices over the past three decades. The situation has become aggravated by the identifiable cases of fiscal and monetary distortions, macroeconomic shocks and gaps in our budgetary provisions that are evident in recurring deficit budgets, fiscal crises, and unsustainable debt profile. The persistence of these problems has, unarguably, impacted negatively on the overall economic performance of Nigeria, and this begs the question of the potency of the use of monetary policy and fiscal policy in addressing our targeted macroeconomic problems. Spurred by the need to finding policy solutions to these problems, this study empirically examines the relative impact of fiscal policy and monetary policy in stimulating gross domestic product in Nigeria. The achieve the study objectives, annual time series secondary data spanning from 1983 to 2021 were empirically analyzed using Autoregressive Distributed Lag (ARDL) estimation after the unit root text revealed a mixed order of integration. The result of the long and short run dynamics revealed that Total Government Expenditure (TOGE) has a positive and statistically significant relationship with GDP in Nigeria. Also, Broad Money Supply (MPMS) and Open Market Operations (MPOM) have positive and statistically significant relationships with GDP within the study period. The study concludes that in the short and long run, monetary policy and fiscal policy play significant roles in stimulating GDP growth in Nigeria. However, in relative terms, fiscal policy is more potent than monetary policy in Nigeria within the review period. The study, therefore, recommends that for the attainment of macroeconomic goals and sustainable economic development effective coordination of monetary and fiscal policy tools should be encouraged for consolidated socio-political and economic gains.