Effect of Public Debt on Nigeria's Economic Growth

This study evaluated the effect of public debt on Nigeria’s economic growth using domestic and external debts as explanatory variables, and gross domestic product at constant prices as the explained variable. The study used time series research design and collected data from CBN statistical bulletin for the period, 1981 to 2022. The study conducted the Descriptive statistics, stationarity and co-integration tests and found out that the variables were stationary in mix order and had long-run relationship. The study therefore adopted the autoregressive distributed lag model for analysis and used the OLS method to test hypotheses. The findings show that domestic and external debts had significant effect on economic growth in the period examined. The study recommended that domestic debt be tied to the provision of domestic oil refining plants to cut down cost of goods and services for households and reduce cost of production for firms operating in Nigeria. Furthermore, government externally contracted loans should be more prudently invested in education and health as these two sectors are the productive base of any economy and will improve the GDP growth rate.