IMPACT OF PUBLIC DEBT ON ECONOMIC GROWTH IN NIGERIA

The amount of capital available in most developing countries treasury is grossly inadequate to meet their economic growth needs mainly due to their low productivity, low savings and high consumption pattern. Most countries resort to borrowing to promote economic growth and development, by creating conducive environment for people to invest in various sectors of their economies. However, despite the huge amount of debts which the country has continued to incur over the years, with the aim of achieving economic growth, high unemployment, poverty, and low standard of living is still prevalent in the country. This study thus examines the impact of public debt on economic growth in Nigeria between 1999 and 2016. Preestimation tests using ADF unit root test were carried out in the course of the study to avoid spurious regression results. Findings from the study revealed that external debt stock has had a significant and positive impact on the growth of Nigerian economy. However, it was found from the empirical analysis that external debt servicing had a significant but negative effect on the growth of Nigerian economy. It shows that an increase in external debt servicing by one percent, has on the average, shnnked Nigeria's economic growth by 0.06 percent between 1986 and 2016. It is recommended that the government should imbibe some measure of fiscal discipline which entails the habit of savings in order to withstand any shock whatsoever from the economy so that instead of resolving into borrowing from external sources, it can sustain economic activities with the accumulated savings. This will in turn avoid servicing of debt and recapitalization of arrears which adds pressure to the existing debt stock