Olaolu, DeleVincent, Harrison S.Kingsley, Nwaigwe O.2023-12-102023-12-102020-01-02Olaolu, Dele , Vincent, Harrison S. & Kingsley, Nwaigwe O. (2020) EFFECT OF GOVERNMENT BORROWING ON ECONOMIC OUTPUT IN NIGERIA.https://keffi.nsuk.edu.ng/handle/20.500.14448/982This study examines the effect of government borrowing on economic output in Nigeria. Government borrowing was proxied by external debt(ED), Domestic debt (DD) and Total debt servicing (TDS) while Economic output was proxied by Gross Domestic Product (GDP). An ex­ post facto research design was employed for this study. Secondary data were collected from Central Bank of Nigeria Statistical Bulletin for twenty years period spanning through 2010 to 2019.Employing the econometric methodology of the Johansen Cointegration and Vector Error Correction Model (VECM), the study established a long run relationship among the variables. The Ordinary Least Square (OLS) result revealed that economic output is significantly influenced by external debt and Domestic debt while debt servicing does not significantly influenced economic output. It is recommended that Government and policy makers should carefully study the present state of the economy before deciding on measures through which deficit will be financed, maintain optimum level of external debt as it is one of the mechanisms for economic output and that all external debt should be effectively utilizedfor the purposef or which it was obtained. Debts should be contracted solely for economic reasons and not for social or political reasons. This is to avoid accumulation of debt stock overtime and prevent an obscuring of the motive behind debt servicing, hence investing this debt finance into capital investment that has the tendency to raise the overall output of the Nigeria economy.enExternal debt, Domestic debt, Debt Servicing, Economic output, NigeriaArticle