Public Debt and Economic Growth in Nigeria: Decades of Unending Struggle

Abstract This paper examines the role of public debt in Nigeria's economic growth process from 1981 to 2021. Generally, economies resort to debt financing in economic growth to lessen the tax burden on the production chain. Applying autoregressive distributed lag models on annualized country data set, we showed that public debt positively affects economic growth in Nigeria. Total public debt in Nigeria could thus be positive and record nearly a 63% increase in economic growth in the long run. Most of the negative effects of public debt on economic growth reveal that debt servicing is still unsustainable in the Nigerian sub-region. Thus, we argued that deliberate policies be put in place to ensure that the accumulation of debt in Nigeria is consistent with the country's growth objectives. Furthermore, the government is encouraged to put in place fiscal reforms that would help in the better management of domestic debt and the acceleration of economic growth in years following this study.