Government Domestic Borrowing and Private Sector Credit Crowding out: Empirical Evidence from Nigeria

Abstract

This study examines the impact of government domestic borrowing on private sector credit in Nigeria from 2009 to 2018. Utilizing an ex-post research methodology, the research employs an Ordinary Least Squares (OLS) multiple regression model. The findings indicate a negative relationship between government domestic bond issuance and bank credit to the private sector, suggesting potential crowding-out effects. However, the relationship is not statistically significant, implying that government borrowing may not have substantially crowded out private sector credit during the study period.