Impact of Domestic Debt on Economic Growth in Nigeria

This study was carried out to ascertain the impact of domestic debt on economic growth in Nigeria from 1986 to 2022. Ex – post facto research design was employed; data used for analysis were elicited from Central Bank Statistical Bulletin of 2018 and World Bank Database: World Development Indicator 2018. Gross domestic product (GDP) was employed as the dependent variable, while ratio domestic debt – revenue, technology and ratio of domestic debt – gross domestic product were utilized as proxy for domestic debt and exchange rate was employed as a control variable. This study employed Auto Regressive Distributed Lag (ARDL) Model to analyze data, other diagnostic tests such as; Cointegration test, unit root test, bound test were also carried out and they confirmed the validity and reliability of the model employed; the inferential results suggested that public debt had positive and significant impact on economic growth in Nigeria. The study recommended that the positive effect of ratio of domestic debt – revenue on gross domestic product (GDP) First, debt management office (DMO) should keep proactive advice on the government on how to make a prudence management of debt that can add value to economic growth, the negative effect ratio domestic debt – GDP on economic growth. It was recommended that debt management office should prioritize productive investment that can serve as a catalyst for economic growth, and also make available sustainable deficit budgeting, and effective utilization of resources, through effective and efficient implementation of projects and programs.