DEBT PROFILE AND THE NIGERIAN ECONOMY

Abstract

This study investigated debt profile and the Nigerian economy. Annual time series data sourced from Central Bank of Nigeria statistical bulletin as well as the publications of National Bureau of Statistics (2000 to 2019) were used to analyze and estimate the multiple regression model specified, with the aid of Econometric views (Eviews) 8.0 version. The study measured economic performance which is the dependent variable by Gross Domestic Product (GDP) while debt profile which is the independent variable was proxy by domestic debt to GDP ratio, external debt to GDP ratio and total debt to total revenue ratio. The parameters of the model were estimated using Ordinary Least Square (OLS) technique. The study found that: a negative and significant relationship exists between domestic debt to GDP ratio and growth in GDP, a negative and significant relationship between external debt to GDP ratio and growth in GDP while a positive and significant relationship exists between total debt to total revenue ratio and growth in GDP in Nigeria. The study concluded that debt burden is an important factor indicator that influences the level of economic activities in Nigeria. The study recommended that loans contracted should be invested in profitable ventures, which will generate a reasonable amount of money for debt repayment.