Public Debt and the Living Condition of People in Nigeria
Keywords:
Public debt; living condition of people; economy; per capita income; foreign debtAbstract
This study assesses the influence of public debt on the condition of living in Nigeria using per capita income (PCI) which signifies the income per person in the country. Due to the fact that public debt is deemed to be suppressing an economy, the standard of living becomes the target of the estimated suppression. Thus, the study employs secondary data from 2000 to 2018 and multiple regression technique is used to carry out the analysis to establish the impact of public debt on PCI. The study finds that the foreign debt is having a substantial harmful effect on PCI while the domestic debt has a weighty favorable impact on PCI. These findings lead to a conclusion that the country is better off with local borrowing instead of external fund sourcing. Therefore, the study suggests that the government can borrow when it is highly necessary and really relevant to the accomplishment of a major capital project that will improve the income of the citizens, but the borrowing should be more domestic based and restricted to marketable securities.
References
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Akhanolu, I. A.; Babajide, A. A.; Akinjare, V.; Oladeji, T. & Osuma, G. (2018). The effect of public debt on economic growth in Nigeria: An empirical investigation. International Business Management, 12(6), 436-441.
Akram, N. (2016). Public debt and pro-poor economic growth: Evidence from South Asian Countries. Economic Research Ekonomska Istrazivanja, 29(1), 746-757. https://doi.org/10.1080/1331677X.2016.1197550.
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Chenery, H.B. & Strout, A.M. (1966). Foreign Assistance and Economic Development. American Economic Review. September, 56(4), 679-733.
Chiu, Y. & Lee, C. (2017). On the impact of public debt on economic growth: Does Country risk matter? Contemporary Economic Policy, 35(4), 751-766. https://doi.org/10.1111/coep.12228.
Chudik, A., Mohaddes, K., Pesaran, M. H. & Raissi, M. (2018). Rising public Debt to GDP can harm economic growth. DALLAS FED Economic Letter, 13(3), 1-4.
Dinca, G. & Dinca, M.S. (2013). The impact of public debt upon economic Growth. International Journal of Education and Research, 1(9), 1-12.
Eneida, P.C. (2018). The relationship between public debt and economic Growth in Albania and Other countries. Academic Journal of Interdisciplinary Studies, 7(3), 95-102. DOI: 10.2478/ajis-2018-0061.
Eze, O. M., Nweke, A.M. & Atuma, E. (2019). Public Debts and Nigeria’s Economic Growth. IOSR Journal of Economics and Finance, 10(3), 24-40. DOI: 10.9790/5933-1003032440.
Gujarati, D. N., & Porter, D. C. (2009). Basic Econometrics (5th Ed.). Boston: McGraw-Hill Irwin. ISBN 978-0-07-337577-9.
Kobey, G. L. (2016). Effect of public debt on economic growth in Kenya. MBA Research Project submitted to the University of Nairobi.
Kothari, C. (2004). Research methodology: methods & techniques, (2nd Ed.). Newage International Publishers, New Delhi, India.
Kurihara, Y. (2015). Debt and economic growth: The case of Japan. Journalof Economic Library, 2(2), 45-52.
Lartey, E. Y., Musah, A., Okyere, B. & Yusif, A. (2018). Public debt and Economic growth: Evidence from Africa. International Journal of Economics and Financial Issues, 8(6), 35-45. https://doi.org/10.32479/ijefi.7057.
Lee, S. & Ng, Y. (2015). Public debt and economic growth in Malaysia. Asian Economic and Financial Review, 5(1), 119-126.
Mbah, S. A., Agu, O.C. & Umunna, G. (2016). Impact of external debt on Economic growth in Nigeria: An ARDL bound testing approach. Journal of Economics and Sustainable Development, 7(10), 16-26.
Ncanywa, T. & Masoga, M.M. (2018). Can public debt stimulate public Investment and economic Growth in South Africa? Cogent Economics & Finance, 6, 1-13. https://doi.org/10.1080/23322039.2018.1516483.
Ndieupa, H.N. (2018). How does public debt affect economic growth? Further evidence from CEMAC Zone. Asian Research Journal of Arts & Social Sciences, 5(1), 1-8. DOI: 10.9734/ARJASS/2018/39080.
Ntshakala, P.L. (2015). Effects of public debt on economic growth in Swaziland. International Journal of Business and Commerce, 5(1), 1-24.
Okoye, L. U., Modebe, N. J., Erin, O. A., & Evbuomwan, G. O. (2013). Effect Of external debt on economic Growth: Evidence from Nigeria. Sustainable Economic Growth, Education Excellence, and Innovation Management through Vision 2020, 4046-4058.
Omodero, C. O. (2019). External debt financing and public capital Investment in Nigeria: A Critical evaluation. Economics and Business, 33(1), 111-126. DOI: 10.2478/eb-2019-0008.
Omodero, C.O. & Alpheaus, O.E. (2019). The Effect of Foreign Debt on the Economic Growth of Nigeria. Management Dynamics in the Knowledge Economy, 7(3), 291-306. DOI: 10.25019/MDKE/7.3.01.
Omodero, C.O. (2019). Domestic Debt and Private Sector Credit in Nigeria: An Empirical Investigation. Acta Universitatis Danubius: Oeconomica, 15(6), 167-186.
Onakoya, A.B. & Ogunade, A.O. (2017). External debt and Nigerian Economic growth Connection: Evidence from autoregressive distributed lag approach. Journal of Economics and Development Studies, 5(1), 66-78. https://doi.org/10.15640/jeds.v5n1a7.
Panagiotis, P. (2018). The effect of government debt and other determinantson economic growth: The Greek experience. Economics, 6(10), 1-19. DOI: 10.3390/economics6010010.
Panizza, U. & Presbitero, A.F. (2013). Public debt and economic growth inadvanced economies: A survey. Swiss Society of Economics and Statistics, 149(2), 175-204.
Panizza, U. & Presbitero, A.F. (2014). Public debt and economic growth: Is There a causal effect? Journal of Macroeconomics, 41, 21-41. https://doi.org/10.1016/j.jmacro.2014.03.009.
Pharm, T.P.T. (2018). Impacts of public debt on economic growth in six ASEAN countries. Ritsumeikan Annual Review of International Studies, 17, 63-88.
Precious, L. N. (2015). Effects of public debt on economic growth in Swaziland. International Journal of Business and Commerce, 5(1), 1-24.
Saifuddin, Md. (2016). Public debt and economic growth: Evidence from Bangladesh. Global Journal of Management and Business Research: B Economics and Commerce, 16(5), 64-73.
Senibi, V., Oduntan, E., Uzoma, O., Senibi, E. & Oluwaseun, A. (2016). Public debt and external Reserve: The Nigerian experience (1981-2013). Economic Research International, 2016, 1-7. http://dx.doi.org/10.1155/2016/1957017.
Tawfiq, A. M. & Shawawreh, A. M. (2017). The impact of public debt on the Economic growth Of Jordan: An Empirical Study (2000-2015). Accounting and Finance Research, 6(2), 114-120. https://doi.org/10.5430/afr.v6n2p114.
Thilanka, H. R. A. C. & Ranjith, J.G.S. (2018). The impact of public debt on private investment: Sri Lankan Experience. International Journal of Business and Social Research, 8(8), 1-10. http://dx.doi.org/10.18533/ijbsr.v8i8.1122.
Udeh, S. N., Ugwu, J. I. & Onwuka, I. O. (2016). External debt and economic Growth: The Nigeria Experience. European Journal of Accounting, Auditing and Financial Research, 4(2), 33-48.
Wangmo, S. (21-22 July 2018). The impact of government debt on the economic growth Of Bhutan. Proceedings of 175th the IIER International Conference Bangkok, Thailand.
Akhanolu, I. A.; Babajide, A. A.; Akinjare, V.; Oladeji, T. & Osuma, G. (2018). The effect of public debt on economic growth in Nigeria: An empirical investigation. International Business Management, 12(6), 436-441.
Akram, N. (2016). Public debt and pro-poor economic growth: Evidence from South Asian Countries. Economic Research Ekonomska Istrazivanja, 29(1), 746-757. https://doi.org/10.1080/1331677X.2016.1197550.
AL-Tamimi, K. A. M. & Jaradat, M. S. (2019). Impact of external debt on Economic growth in Jordan for the period (2010-2017). International Journal of Economics and Finance, 11(4), 114-118. https://doi.org/10.5539/ijef.v11n4p114.
Chenery, H.B. & Strout, A.M. (1966). Foreign Assistance and Economic Development. American Economic Review. September, 56(4), 679-733.
Chiu, Y. & Lee, C. (2017). On the impact of public debt on economic growth: Does Country risk matter? Contemporary Economic Policy, 35(4), 751-766. https://doi.org/10.1111/coep.12228.
Chudik, A., Mohaddes, K., Pesaran, M. H. & Raissi, M. (2018). Rising public Debt to GDP can harm economic growth. DALLAS FED Economic Letter, 13(3), 1-4.
Dinca, G. & Dinca, M.S. (2013). The impact of public debt upon economic Growth. International Journal of Education and Research, 1(9), 1-12.
Eneida, P.C. (2018). The relationship between public debt and economic Growth in Albania and Other countries. Academic Journal of Interdisciplinary Studies, 7(3), 95-102. DOI: 10.2478/ajis-2018-0061.
Eze, O. M., Nweke, A.M. & Atuma, E. (2019). Public Debts and Nigeria’s Economic Growth. IOSR Journal of Economics and Finance, 10(3), 24-40. DOI: 10.9790/5933-1003032440.
Gujarati, D. N., & Porter, D. C. (2009). Basic Econometrics (5th Ed.). Boston: McGraw-Hill Irwin. ISBN 978-0-07-337577-9.
Kobey, G. L. (2016). Effect of public debt on economic growth in Kenya. MBA Research Project submitted to the University of Nairobi.
Kothari, C. (2004). Research methodology: methods & techniques, (2nd Ed.). Newage International Publishers, New Delhi, India.
Kurihara, Y. (2015). Debt and economic growth: The case of Japan. Journalof Economic Library, 2(2), 45-52.
Lartey, E. Y., Musah, A., Okyere, B. & Yusif, A. (2018). Public debt and Economic growth: Evidence from Africa. International Journal of Economics and Financial Issues, 8(6), 35-45. https://doi.org/10.32479/ijefi.7057.
Lee, S. & Ng, Y. (2015). Public debt and economic growth in Malaysia. Asian Economic and Financial Review, 5(1), 119-126.
Mbah, S. A., Agu, O.C. & Umunna, G. (2016). Impact of external debt on Economic growth in Nigeria: An ARDL bound testing approach. Journal of Economics and Sustainable Development, 7(10), 16-26.
Ncanywa, T. & Masoga, M.M. (2018). Can public debt stimulate public Investment and economic Growth in South Africa? Cogent Economics & Finance, 6, 1-13. https://doi.org/10.1080/23322039.2018.1516483.
Ndieupa, H.N. (2018). How does public debt affect economic growth? Further evidence from CEMAC Zone. Asian Research Journal of Arts & Social Sciences, 5(1), 1-8. DOI: 10.9734/ARJASS/2018/39080.
Ntshakala, P.L. (2015). Effects of public debt on economic growth in Swaziland. International Journal of Business and Commerce, 5(1), 1-24.
Okoye, L. U., Modebe, N. J., Erin, O. A., & Evbuomwan, G. O. (2013). Effect Of external debt on economic Growth: Evidence from Nigeria. Sustainable Economic Growth, Education Excellence, and Innovation Management through Vision 2020, 4046-4058.
Omodero, C. O. (2019). External debt financing and public capital Investment in Nigeria: A Critical evaluation. Economics and Business, 33(1), 111-126. DOI: 10.2478/eb-2019-0008.
Omodero, C.O. & Alpheaus, O.E. (2019). The Effect of Foreign Debt on the Economic Growth of Nigeria. Management Dynamics in the Knowledge Economy, 7(3), 291-306. DOI: 10.25019/MDKE/7.3.01.
Omodero, C.O. (2019). Domestic Debt and Private Sector Credit in Nigeria: An Empirical Investigation. Acta Universitatis Danubius: Oeconomica, 15(6), 167-186.
Onakoya, A.B. & Ogunade, A.O. (2017). External debt and Nigerian Economic growth Connection: Evidence from autoregressive distributed lag approach. Journal of Economics and Development Studies, 5(1), 66-78. https://doi.org/10.15640/jeds.v5n1a7.
Panagiotis, P. (2018). The effect of government debt and other determinantson economic growth: The Greek experience. Economics, 6(10), 1-19. DOI: 10.3390/economics6010010.
Panizza, U. & Presbitero, A.F. (2013). Public debt and economic growth inadvanced economies: A survey. Swiss Society of Economics and Statistics, 149(2), 175-204.
Panizza, U. & Presbitero, A.F. (2014). Public debt and economic growth: Is There a causal effect? Journal of Macroeconomics, 41, 21-41. https://doi.org/10.1016/j.jmacro.2014.03.009.
Pharm, T.P.T. (2018). Impacts of public debt on economic growth in six ASEAN countries. Ritsumeikan Annual Review of International Studies, 17, 63-88.
Precious, L. N. (2015). Effects of public debt on economic growth in Swaziland. International Journal of Business and Commerce, 5(1), 1-24.
Saifuddin, Md. (2016). Public debt and economic growth: Evidence from Bangladesh. Global Journal of Management and Business Research: B Economics and Commerce, 16(5), 64-73.
Senibi, V., Oduntan, E., Uzoma, O., Senibi, E. & Oluwaseun, A. (2016). Public debt and external Reserve: The Nigerian experience (1981-2013). Economic Research International, 2016, 1-7. http://dx.doi.org/10.1155/2016/1957017.
Tawfiq, A. M. & Shawawreh, A. M. (2017). The impact of public debt on the Economic growth Of Jordan: An Empirical Study (2000-2015). Accounting and Finance Research, 6(2), 114-120. https://doi.org/10.5430/afr.v6n2p114.
Thilanka, H. R. A. C. & Ranjith, J.G.S. (2018). The impact of public debt on private investment: Sri Lankan Experience. International Journal of Business and Social Research, 8(8), 1-10. http://dx.doi.org/10.18533/ijbsr.v8i8.1122.
Udeh, S. N., Ugwu, J. I. & Onwuka, I. O. (2016). External debt and economic Growth: The Nigeria Experience. European Journal of Accounting, Auditing and Financial Research, 4(2), 33-48.
Wangmo, S. (21-22 July 2018). The impact of government debt on the economic growth Of Bhutan. Proceedings of 175th the IIER International Conference Bangkok, Thailand.
Published
2020-05-26
How to Cite
Omodero, C. O. (2020). Public Debt and the Living Condition of People in Nigeria: Array. EuroEconomica, 39(1). Retrieved from https://dj.univ-danubius.ro/index.php/EE/article/view/244
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