DOES DOMESTIC DEBT INSTRUMENTS MATTER TO NIGERIAN ECONOMIC GROWTH?

Paschaline Ogbu, Callistus Ogu

Abstract


The study examined the effect of domestic debt on economic growth from 1996 to 2020. The study disaggregated the instruments of domestic debts which are treasury bills, treasury bonds, federal government bonds, and development stocks in analyzing their respecting effects on economic growth in Nigeria. The study used Johansson co integration and error correction method of analysis in analyzing the data. However the results identified that; treasury bills had a positive significant relationship with economic growth in Nigeria; Treasury bond had a negative significant relationship with economic growth in Nigeria; FGN bond had a positive significant relationship with economic growth in Nigeria; development stock had a negative significant impact on economic growth in Nigeria. It was concluded that domestic debts is crucial in promoting economic growth and development of any economy and it was recommended that; Debts from Treasury bills should be apportioned appropriately in order to enhance economic growth in Nigeria; Debts from Treasury bonds should not be encouraged due to its negative effects to economic growth in Nigeria; except if it can be appropriately allocated for efficiency utilization; Debts from federal government bonds should be apportioned appropriately in order to enhance economic growth in Nigeria; Debts from Development stocks should not be encouraged due to its negative effects to economic growth in Nigeria; except if it can be appropriately allocated for efficiency utilization.


Keywords


Domestic Debts, Treasury Bills, Treasury Bonds, Federal Government Bonds, Development Stocks, Economic Growth.

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