EFFECT OF PUBLIC DEBTS ON ECONOMIC DEVELOPMENT IN NIGERIA

Abstract

The study examined the effect of public debts on economic development in Nigeria. Descriptive research design has been adopted for the purpose of this study. The proxies of public debts consist of internal debt, external debt and debt servicing while the dependent variable is economic development. The indicators and variables that contribute to economic development of the Nigeria economy for the period of 1986 to 2020. The data were collected from secondary source via the Central Bank of Nigeria (CBN) statistical bulletin. The study made used of regression analysis as the data analysis technique. The result indicate that external debt has a negative effect on economic development while internal debt has positive effect on economic development. Furthermore, debt servicing has a negative effect on economic development in Nigeria. Hence, increase in debt servicing will reduce per capita income in Nigeria. Based on the finding, the study concludes that heavy public debt burden reduces economic development therefore, the study recommend that government debt should be properly channel to the project that can generate income and boast economic development.