Effect of Increasing Government Debt Profile on Economic Prosperity of Nigeria (Published)
The study aimed at assessing the effect of increasing government debt profile on economic prosperity of Nigeria. Specifically, the study examined the extent that Gross Domestic Product (GDP) was affected, during the period of study, by rising domestic debt, external debt, and cost of borrowing in Nigeria. The data for analysis were sourced principally from CBN Bulletins and Debt Management Office. The null hypotheses that domestic debt, external debt, and cost of borrowing do not significantly affect Gross Domestic Product, were tested through a multiple regression analysis. The findings indicate that Domestic Debt has a positive and significant effect on Gross Domestic Product in Nigeria with coefficient of 1.005965 and p-value of 0.0000. Furthermore, the external debt stock reveals a negative and non-significant effect on Gross Domestic Product with coefficient of -0.083963 and p-value of 0.5909, while Cost of Borrowing exposes a positive and non-significant effect on Gross Domestic Product in Nigeria with coefficient of 0.038835 and p-value of 0.7589. The R-squared (Coefficient of Determination) indicates that 98% of the variations in Gross Domestic Product in Nigeria could be explained by changes in Domestic Debt, External Debt and Cost of Borrowing. The implication of the findings is that economic prosperity is facilitated by Domestic Borrowing while External Borrowing must be avoided where possible because of its’ negative effect on GDP. In addition, the effect of Cost of Borrowing on GDP is purely dependent on the appropriateness of use of borrowed fund. The study recommended that government should first explore internal sources of fund whenever borrowing is unavoidable in preference to foreign/external sources, reduce or avoid external borrowing and properly apply the borrowed fund for its economy to prosper.
Keywords: External Debt, Gross Domestic Product, Nigeria, cost of borrowing, economic prosperity, internal debt
Effect of Government Recurrent Expenditure on Economic Prosperity in Nigeria (Published)
The study investigated effect of government recurrent expenditure on economic prosperity in Nigeria. The specific objectives of the study were to examine effect of administration expenditure, economic services expenditure, and social and community services (which are proxies for government recurrent expenditure) on gross national product (proxied by economic prosperity) in Nigeria. The study adopted ex-post facto research design and secondary data were extracted from the CBN Statistical Bulletin for the period 1981 – 2022. The multiple regression was used for the test of hypotheses. Findings showed that, recurrent expenditure on administration (GREA) have a statistically non-significant positive effect on Gross National Product (GNP) in Nigeria with a t-statistic of -0.710148 and p-value of 0.4821. On the other hand, recurrent expenditure on economic services (GREES) has a statistically significant positive effect on GNP in Nigeria with a t-statistic of 2.106309 and p-value of 0.0420. In line with recurrent expenditure on administration, recurrent expenditure on social and community services (GRESCS) have a statistically non-significant positive effect on GNP in Nigeria with a t-statistic of 1.835944 and p-value of 0.0744. This implies that only recurrent expenditure on economic services can be used to predict economic prosperity in Nigeria. The study recommended that administrative efficiency should be improved through the reduction of unnecessary costs and streamlining of processes, supported by regular performance evaluations and the adoption of modern technology. Secondly, investments should prioritize critical infrastructure projects like transportation, energy, and telecommunications, aiming to stimulate economic growth and job creation. Lastly, targeted social programs are encouraged to address specific challenges such as poverty reduction, healthcare access, and education, ensuring adequate funding and effective reach to beneficiaries, while also investing in healthcare infrastructure and supporting community development projects that reduce inequality and promote social stability, resulting in long-term benefits for citizens’ well-being.
Keywords: Gross National Product (GNP), administration expenditure, economic prosperity, economic services expenditure, government recurrent expenditure, social and community services expenditure