Effects of Mounting Public Debt on Economic Growth in Nigeria

This study used the Auto Regression Distributed Lag (ARDL) technique to analyze the relationship between public debt and economic development in Nigeria between 1999 and 2023. The study specifically looked into how Nigeria's inflation rate, external debt, and domestic debt affected the country's economic growth. GDP served as a stand-in for economic growth, and the explanatory variables were the inflation rate (IFN), external debt (ED), and domestic debt (DM). The findings showed that all three factors (DM), ED, and INF had little long-term effects on economic growth. All variables, however, were found to have a negligible long-term relationship with economic growth. Long-term economic growth was found to be positively and marginally correlated with both the inflation rate and domestic debt, suggesting that raising both will eventually boost Nigeria's economy. However, there was a negative and negligible impact of external debt on economic development. In other words, their rise will eventually slow Nigeria's economic progress. The study came to the conclusion that public debt indices have little long-term effect on Nigeria's economic growth. Therefore, it is advised that policymakers incorporate the necessary steps to guarantee appropriate management of domestic debts. The government should make sure that accrued national debts are used to promote investment in the nation and, through the appropriate monitoring committees, ensure that national debts are used to provide the essential facilities and services needed for the advancement of the nation's communities and societies.