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DOC-20240927-WA0043.

The document reviews various studies on the impact of public debt on Nigeria's economic growth, highlighting that debt refinancing and forgiveness negatively affect the debt profile, while domestic debt can positively influence economic growth. It emphasizes the need for effective debt management strategies to mitigate adverse effects and promote sustainable economic development. Overall, the findings suggest a complex relationship between different types of debt and economic growth in Nigeria, necessitating careful policy considerations.

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5 views3 pages

DOC-20240927-WA0043.

The document reviews various studies on the impact of public debt on Nigeria's economic growth, highlighting that debt refinancing and forgiveness negatively affect the debt profile, while domestic debt can positively influence economic growth. It emphasizes the need for effective debt management strategies to mitigate adverse effects and promote sustainable economic development. Overall, the findings suggest a complex relationship between different types of debt and economic growth in Nigeria, necessitating careful policy considerations.

Uploaded by

Alfred
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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In the research conducted by Rafindadi and Musa (2018) on public debt

management strategies in Nigeria, the study focused on assessing the


impacts of debt refinancing (DRF), debt forgiveness (DF), and debt
conversion (DCV) on the country's debt profile. The study utilized
econometric research methods and analyzed secondary time series data
spanning from 1981 to 2016 sourced from various official records. The
findings of the study revealed that debt refinancing had a negative impact
on Nigeria's total debt profile. Additionally, debt forgiveness was observed
to have a significant negative effect on the country's debt profile, while
debt conversion was found to have a notable impact on Nigeria's debt
profile.

In the study by Oyedele, David, and Omojola (2016) that examined the
impact of public debt on economic growth in Nigeria, a quantitative
research method was employed. The researchers collected secondary
data covering a period of forty-one years (1970-2011) from sources such
as the CBN Statistical Bulletin and the World Development Indicators. The
study's results indicated that there was no long-run relationship between
public debt and economic growth in Nigeria. It was noted that a positive
but non-significant relationship existed between per capita domestic
public debt and economic growth, while a negative and non-significant
relationship was observed between per capita external public debt and
economic growth.

In the research conducted by Naeem (2015) on the impact of public debt


on economic growth, the study employed various analytical techniques to
explore the consequences of public external debt on economic growth and
investment. The findings revealed a negative and significant effect of
public external debt on economic growth and investment, supporting the
presence of a debt overhang effect. However, the study did not find
substantial evidence to support the crowding out hypothesis, as debt
servicing demonstrated significant relationships with investment and
economic growth in the economy. Moreover, the research highlighted that
domestic debt had a negative influence on investment but a positive
effect on economic growth. As a result, the study recommended that
developing countries should implement policies aimed at reducing their
debt burden to accelerate economic growth.

Delving into the study conducted by Elom-Obed, Odo, Elom, and Anoke
(2017) on the relationship between public debt and economic growth in
Nigeria from 1980 to 2015, the researchers utilized co-integration tests,
Vector Error Correction Model (VECM), and Granger causality tests. The
variables examined in the research included real gross domestic product,
domestic private savings, external debt, and domestic debt. The empirical
findings of the study indicated that both external debt and domestic debt
had negative and significant impacts on economic growth in Nigeria.
Furthermore, the results revealed that domestic debt and external debt
had Granger causality relationships with real gross domestic product
(RGDP), suggesting that changes in external and domestic debt influenced
RGDP. In a related study by Stephen and Obah (2017) focusing on the
influence of national savings on economic growth in Nigeria from 1990 to
2015, descriptive statistics analysis and Ordinary Least Square (OLS) were
employed.

Diving deeper into the research conducted by Okwu, Obiwuru, and


Oluwalaiye (2016) on the effects of domestic debt on economic
development in Nigeria from 1980 to 2015. The study employed various
analytical tools such as descriptive statistics, unit root tests, co-
integration tests, and an error correction model (ECM) to examine the
relationship between domestic debt and economic development. The
factors studied in the research included real gross domestic product,
domestic debt stock, domestic debt service expenditure, and average
banks' lending rate. The study's findings indicated that overseas debt
service expenditure had a significant and positive impact on economic
growth in Nigeria. Conversely, domestic debt service expenditure was
found to have a significant and negative effect on economic growth.
Additionally, the bank's loan rate was observed to have a negative impact
on Nigerian growth, although it was deemed insignificant. These results
underscore the importance of carefully managing both domestic and
overseas debt service expenditures to foster economic growth effectively.

Expanding on Sylvester's (2021) study focusing on the nexus between


external debt and economic growth in Nigeria, the research aimed to
explore the relationship between external debt and economic growth to
inform policy decisions regarding public finance and debt management.
The study analyzed data on Nigeria's external debt and GDP growth rate
using root tests and cointegration long-run tests. The findings of the study
highlighted that variables such as debt overhang and crowding out effect
negatively impacted investment levels, thereby adversely affecting the
economic growth of Nigeria. This underscores the importance of carefully
managing external debt to mitigate these adverse effects and promote
sustainable economic growth in the country. Effective policies that address
debt-related challenges can help optimize investment opportunities and
foster economic development in Nigeria.
Expanding on the research conducted by Alagba and Eferakeya (2019) on
the impact of public debts on the economic growth of Nigeria over a 38-
year period from 1981 to 2018. The study utilized data sourced from the
Central Bank of Nigeria Statistical bulletin and Debt Management Office.
One of the key objectives of the study was to assess the influence of both
domestic and foreign debts on Nigeria's economic growth. The study's
findings indicated that domestic debts of the Federal government of
Nigeria had a positive and statistically significant effect on the economic
growth of the country. This suggests that effectively managing and
utilizing domestic debts can contribute positively to the economic
development of Nigeria.

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