EFFECT OF PUBLIC DEBT ON ECONOMIC GROWTH

This study examines how public debt influences economic growth in Nigeria, drawing on twenty years of data covering both domestic and external borrowing. Nigeria has increasingly relied on public debt to fund development, yet rising debt-servicing obligations have created concerns about the country’s fiscal stability and the crowding-out of essential public investment. The study reviews major theories of debt and growth, highlights Nigeria’s historical borrowing patterns, and analyzes whether public debt contributes to or slows down long-term economic performance. Using secondary data from the Central Bank of Nigeria, the National Bureau of Statistics, the Debt Management Office, and international development institutions, the research assesses the relationship between public debt, debt servicing, GDP growth, and government investment. The findings show that while public debt can support growth when properly utilized, Nigeria’s high debt-servicing burden reduces the resources available for capital expenditure and weakens the overall impact of debt on economic performance. Evidence also suggests that persistent borrowing, weak non-oil revenue, and macroeconomic instability limit the growth-enhancing potential of public debtThis study examines how public debt influences economic growth in Nigeria, drawing on twenty years of data covering both domestic and external borrowing. Nigeria has increasingly relied on public debt to fund development, yet rising debt-servicing obligations have created concerns about the country’s fiscal stability and the crowding-out of essential public investment. The study reviews major theories of debt and growth, highlights Nigeria’s historical borrowing patterns, and analyzes whether public debt contributes to or slows down long-term economic performance. Using secondary data from the Central Bank of Nigeria, the National Bureau of Statistics, the Debt Management Office, and international development institutions, the research assesses the relationship between public debt, debt servicing, GDP growth, and government investment. The findings show that while public debt can support growth when properly utilized, Nigeria’s high debt-servicing burden reduces the resources available for capital expenditure and weakens the overall impact of debt on economic performance. Evidence also suggests that persistent borrowing, weak non-oil revenue, and macroeconomic instability limit the growth-enhancing potential of public debt