Conference Paper

IMPACT OF DEBT ON ECONOMIC GROWTH IN NIGERIA

Abstract The study examined the impact of debt servicing on economic growth in Nigeria, focusing on total debt outstanding, domestic debt outstanding, and debt refinancing as key components affecting gross domestic product (GDP). The objectives are to assess the effect of total debt outstanding, evaluate the role of domestic debt outstanding, and analyze the influence of debt refinancing on GDP. An ex-post factor research design was employed, analyzing secondary data from 2008 to 2023. The population included all debt records in Nigeria, with a sample size covering a 16-year period. Data were collected from reputable sources such as the Central Bank of Nigeria and analyzed using multiple regression analysis in E-Views 13. The results indicated that total debt outstanding had an insignificant negative impact on GDP (coefficient = 0.0029, p-value = 0.8698), while domestic debt outstanding significantly influenced GDP positively (coefficient = 0.1401, p-value = 0.0177). Debt refinancing showed no significant effect on GDP (coefficient = 0.0329, p-value = 0.3110). The r-squared value of 0.8877 suggested a strong explanatory power of the model, with 88.77% of the variance in GDP explained by the debt components. In conclusion, the study found that domestic debt positively affects economic growth, while total debt and debt refinancing do not significantly contribute to GDP. Among others, the study recommended that Nigeria returns, thus reducing reliance on external debt. Keywords: Debt Refinancing, Domestic Debt Outstanding, Economic Growth, Gross Domestic Product, Total Debt Outstanding