Impact of Public Debt on National Development in Nigeria

The Impact of Public Debt on National Development in Nigeria (1986-2022). This study employs quantitative research for the empirical assessment. The study adopts the ex-post facto. Ordinary Least square (OLS) were used to analyse the long-run relationships between the variables. The data for the analysis were sourced from Central Bank of Nigeria (CBN), Debt Management Office (DMO), National Bureau of Statistics (NBS), International Monetary Fund (IMF) and World Bank, using the time series data spans from 1986 to 2022. The variables included are domestic debt, external debt, exchange rates and the Human Development Index (HDI) as a proxy for national development. The study revealed that domestic debt has a positive effect, and it is statistically significant on national development in Nigeria, which means that a 1% increase in domestic debt resources resulted in a 21% increase in the HDI. However, external debt and exchange rate fluctuations have negative and positive impacts on national development, respectively. Furthermore, a 1% increase in external debt resources resulted in a 1% decrease in HDI by 16 per cent and a 1% rise in the exchange rate, resulting in a 4% decrease in HDI. The study concluded that Public Debt has an impact on National Development in Nigeria. The study recommends that the Federal Government of Nigeria shift towards domestic borrowing in order to achieve development targets and policy measures that will curb excessive external borrowing and exchange rate fluctuations to ensure that public debt management enables Nigeria to achieve its national development and economic sustainability.