Does Public Debt Determine Economic Growth; Evidence from Nigeria

Abstract

The study examined the impact of public debt on economic growth of Nigeria with data captured from 1990-2020. Real Gross Domestic Product Growth Rate formed the dependent variable while external debt, domestic debt, exchange rate, inflation and interest rate are the independent variables. The study adopted Ex-post facto research design and also employed Ordinary Least Square analytical method. The findings of the study revealed that external debt had a positive and significant relationship with the real gross product growth rate, internal debt had a positive and significant relationship with the real gross product growth rate and that there was a uni-directional causality relationship between real gross product growth rate and external debt. The study therefore recommended that government should professionally manage the nations rising debt profile so as to avoid future debt trap, they should influence increase in local productivities and access to local financial facilities more and that they should also ensure stable exchange rate value of Naira.