ASAOLU, Adepoju Adeoba, fnmimn, fcib, pmp, PhD1
ADEWALE, Abass Adekunle, Acib, Mnim, Acipm2 OZABEME, Lucky Saviour3
1,2,3Department of Finance
Federal University Oye Ekiti Ekiti State Nigeria
adepoju.asaolu@fuoye.edu,ng, Corresponding author abassadewale96@gmail.com, ozabemelucky@gmail.com
09056820666 08034018357 +2348135362344 07037627915
Abstract
The research investigates how public debt affects Nigerian economic expansion when analyzing external debt as well as domestic debt and interest rate and inflation rate elements. Public debt plays a crucial role in finances economic operations yet high borrowing interferes with growth potential. The research seeks to uncover if public debt stimulates economic growth or hinders its advancement in Nigeria. The analysis utilized Ordinary Least Squares (OLS) regression to evaluate data from 2001 to 2023. The data shows Real Gross Domestic Product (RGDP) together with external debt and domestic debt and interest rate and inflation rate demonstrate notable changes. The correlation results show negative associations between external debt and domestic debt and Real Gross Domestic Product yet interest rates maintain a positive correlation. External debt enhances economic growth performance (β = 0.001, p = 0.045) according to regression analysis and domestic debt negatively affects RGDP (β = -0.000, p = 0.029). The analysis shows how interest rates increase growth but inflation does not affect it significantly. Due to previous research results we understand that proper debt handling techniques and effective usage of loans are essential. Research results indicate that Nigeria needs to use borrowing funds productively and minimize domestic debt exposure as it works to sustain economic growth through sound monetary policies. The search results serve as crucial information for policymakers who must maintain debt sustainability together with long-term economic steadiness.
Keywords: External debt, domestic debt, interest rate, and inflation rate, economic growth.