Effect of Public Debt on Public Investment in Nigeria: 1985-2018

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Chukwu, Kenechukwu Origin
Ogbonnaya-Udo, Nneka
Chimarume Blessing Ubah


This study examined the effect of Nigeria public debt on public investment from 1985-2018. Data for the analysis was obtained from Central Bank of Nigeria Statistical bulletin and the study chooses Nigeria as its sample. ARDL Auto-regressive Distributed lag models was used to test the effect of the independent variables (Public Debt, Budget Deficit, Debt Servicing, Public Debt to GDP Ratio) on the dependent variable (Public Investment). The cointegration test found the existence of long-run relationship among the investigated variables. The short run result shows that public debt has insignificant effect on public investment in Nigeria. The study therefore recommends among others that Federal government should be fiscal responsible by channeling borrowed funds to investments that will bring growth in the economy. Government should tackle waste and corruption by making sure that funds borrowed and allocated for investment should be transparently and judiciously utilized in the provision of infrastructure. Debts should be taken only when necessary and should be for investment and not for payment of salaries.

OLS regression, public investment, public debt, economic development.

Article Details

How to Cite
Origin, C. K., Nneka, O.-U., & Ubah, C. B. (2021). Effect of Public Debt on Public Investment in Nigeria: 1985-2018. Asian Journal of Economics, Business and Accounting, 21(2), 98-114. https://doi.org/10.9734/ajeba/2021/v21i230353
Original Research Article


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