PUBLIC DEBT SUSTAINABILITY AND ECONOMIC PERFORMANCE IN NIGERIA

ABSTRACT

This study provides a comprehensive analysis of public debt sustainability and economic growth in Nigeria using data spanning from 1981 to 2021. Through regression analysis, the study investigates the relationships between domestic debt, exchange rate, external debt, trade openness, and GDP growth rate. The findings reveal several key insights crucial for economic policymaking. Firstly, there is a significant negative relationship between domestic debt and GDP growth rate, emphasizing the importance of prudent debt management. Despite the insignificant relationship between the exchange rate and GDP growth rate, maintaining exchange rate stability remains crucial. Moreover, the study identifies a significant positive association between external debt and GDP growth rate, highlighting the need for cautious external borrowing. However, the relationship between trade openness and GDP growth rate is found to be insignificant, suggesting the need for further exploration. Overall, effective debt management policies, exchange rate stability, and promotion of trade openness are essential for sustainable economic growth in Nigeria. Continued research and capacity building efforts are necessary to navigate the complexities of public debt dynamics and achieve long-term economic prosperity.