International Journal of Management, Economics and Social Sciences
2024, Vol. 13(1-2), pp. 25 – 40.
ISSN 2304 – 1366
https://www.ijmess.com
DOI: 10.32327/IJMESS/13.1-2.2024.2
2024, Vol. 13(1-2), pp. 25 – 40.
ISSN 2304 – 1366
https://www.ijmess.com
DOI: 10.32327/IJMESS/13.1-2.2024.2
Macroeconomic Effects of Public Debt in Nigeria
Oladotun Richard Olaniran1
Olanipekun Emmanual Falade2
1Greenwich Business School, University of Greenwich, London, United Kingdom
2Dept. of Economics Obafemi Awolowo University, Ile-Ife, Nigeria
Olanipekun Emmanual Falade2
1Greenwich Business School, University of Greenwich, London, United Kingdom
2Dept. of Economics Obafemi Awolowo University, Ile-Ife, Nigeria
ABSTRACT
The purpose of this study was to investigate the impact of domestic
and external debt on macroeconomic variables in Nigeria from 1981
to 2020. Annual secondary data on domestic and external debt,
inflation, output, investment and consumption sourced from World
Development Indicators (WDI, 2021), and CBN Statistical Bulletin
(2020) were used. The study employed two-stage least squares
method to evaluate the differential effects of foreign and
domestic debt on key macroeconomic variables. The findings showed
a positive relationship between domestic debt and private
consumption in Nigeria, while a negative relationship exists
between external debt and private consumption. Also, an increase
in external debt led to increased private investment. The study
emphasized the importance of prudent debt management in mitigating
inflationary pressures. This implied that domestic debt had a more
significant negative impact on output and economic growth, while
external debt had less immediate adverse effects. Policymakers
should balance debt composition and use borrowed funds for
purposes for sustainable economic growth.
Keywords: Macroeconomics effects, domestic debt, external debt, private consumption, Nigeria
JEL: F34, H6, H63
Keywords: Macroeconomics effects, domestic debt, external debt, private consumption, Nigeria
JEL: F34, H6, H63
