FISCAL SUSTAINABILITY IN NIGERIA: When Should the Government Cut down Public Debt?
- Friday Osemenshan Anetor
- ( paper pages. 237 - 258 )
Abstract
The surge in Nigeria’s public external debt in recent times has raised
serious concern about whether it has reached a point where it would have
adverse effect on economic growth. Does such a tilting point in external debt
exist? What is the effect of public external debt on economic growth should it
exceed this threshold? This study addressed these questions using the autoregressive
distributed lag (ARDL) model and threshold regression on data spanning 1981-2020.
The findings of the study show that public external debt had a positive and
significant impact on economic growth in the short and long-run in Nigeria. The threshold regression estimate
established an external debt-to-GDP ratio of 34.55 percent. This presupposes
that the nation’s external debt-to-GDP should not exceed this threshold. Should
the country’s external debt go beyond this threshold, public external debt
would have adverse impact on the economy
Citation
Friday Osemenshan Anetor.
2023.
"FISCAL SUSTAINABILITY IN NIGERIA: When Should the Government Cut down Public Debt?"
The Nigerian Journal of Economic and Social Studies,
65 (2): 237 - 258.
JEL Classification
F43, C24, H60, O23
