Impact of Public Debt on the Nigerian Economy

Public debt has been used by government to finance their expenditure, especially when there are budgetary deficits. This has left many developing countries like Nigeria with humongous outstanding debts from both domestic and external sources, thus the need to examine the impact of public debt on the Nigerian economy. This paper addresses the impact of public debt, namely domestic debt and external debt on the Nigerian economy from 2008 to 2023. A multiple regression model and the ordinary least squares technique were employed in the analysis. Results showed that domestic debt had negative and insignificant impact on the economy, while external debt had positive but insignificant impact. It appears that Nigeria has not effectively utilized the funds obtained through borrowing from both internal and external sources for the benefit of the economy. It is recommended that government reduce the current level of domestic borrowing, while focusing on how to put external funds to more effective and efficient use with stricter monitoring. More attention should also be directed on strengthening the country’s debt management strategies by deploying resources to productive areas and ensuring prudent borrowing practices.