PUBLIC INVESTMENTS AND NIGERIA'S EXTERNAL DEBT PROFILE

The study investigated the relationship between public investment and Nigeria’s external debt profile from 2015 to 2024. The specific objectives are as follow: to examine the relationship between capital expenditure on education and Nigeria’s external debt, to investigate the relationship between capital expenditure on agriculture and Nigeria’s external debt and to evaluate the relationship between capital expenditure on health care and Nigeria’s external debt. Data for the study were collected from Central Bank of Nigeria (CBN) statistical bulletin, National Bureau of Statistics (NBS) Report and Debt Management Office (DMO). Data were analyzed using correlation analysis model. The result showed that there is a weak positive and insignificant relationship between capital expenditure on education and Nigeria’s external debt. With a P-value of 0.507, the test is considered statistically insignificant at 5% level. This could be verifiedwith the coefficient of correlation of 0.239% which indicates that increase in capital expenditure on education weakly increases nation’s external debt by 23.9%. It also revealed that there is an insignificant and weak negative relationship between capital expenditure on agriculture and Nigeria’s external debt. With a P-value of 0.437, the test is considered statistically insignificant at 5% level. This could be verified with the coefficient of correlation of -0.278% which indicates that increase in capital expenditure on agriculture decreases Nigeria’s external debt by -27.8%. It also showed that there is an insignificant and weak negative relationship between capital expenditure on health care and Nigeria’s external debt. With a P-value of 0.944, the testis considered statistically insignificant at 5% level. This could be verified with the coefficient of correlation of -0.026% which indicates that increase in capital expenditure on health care decreases Nigeria’s external debt by -2.6%. The study recommends among others that government at all levels should only seek external borrowing when vital priority projects are being considered and should equally place a limit on external borrowing.