Imperatives of Domestic Debt Payments And Economic Growth: the Nigerian Evidence

Abstract

The broad objective of this research work is to investigate the Effect of Domestic Debt Payments on Economic Growth in Nigeria (2000-2016). The quantitative design using ordinary least- square (OLS) method of multiple regression analysis was employed. However, secondary data for this study was obtained from CBN annual report, federal office of statistics and Debt Management Office. The finding indicates that domestic debt outstanding has significant relationship between Gross Domestic Product in Nigeria. Likewise, there is significant relationship between interest rate and debt servicing on Gross Domestic Product in Nigeria. The coefficient of determination indicates that about 85 percent of the debt variables (DDO, INT and IDS in Nigeria). This implies that a good portion of gross domestic product can be explained by changes in domestic debt variables. It is recommended that Government should maintain a bank deposit ratio below 40% and resort to increase use of tax revenue to finance its project. The regulatory authorities should provide enabling environment and policies for private sector investors with improved infrastructure