ONYENDI Hilary Uchenna
Department of Banking and Finance.
Michael Okpara University of Agriculture Umudike, Abia State
hilluch2008@yahoo.com
IBEABUCHI-ANI Ogechi
Department of Banking and Finance.
Michael Okpara University of Agriculture Umudike, Abia State
ogecibeabuchiani@gmail.com
ONUEGBU Onyekachi
Department of Banking and Finance.
Michael Okpara University of Agriculture Umudike, Abia State
onyekaonu2018@gmail.com
ABSTRACT
Nigeria has witnessed unprecedentedly high public debt servicing over the years. Debates on this worrisome
development have generated controversies among policy-makers and academics. This study therefore, examined effect of public debt servicing on per capita output in Nigeria from 1981 to 2022. The objective of the study was to ascertain how debt servicing has impacted gross domestic product per capita within the period under review.
Secondary data obtained from the Statistical Bulletin of the Central Bank of Nigeria was used for the study.
Descriptive and econometric statistics were used for data analysis. The econometric tools used are the unit root tests, the autoregressive distributed lag and the Granger causality tests. Findings indicate that public debt servicing has negative effect on per capita output, that there no long-run relationship between debt servicing and output per capita, and that there is no causality between the explanatory variables- (debt servicing, budget financing, debt to GDP ratio, inflation, real effective exchange rate) and per capita). The study conclude that public debt servicing has negative effect on GDP per capita, and recommends that government should optimally utilize borrowed funds.
Keywords: Per capita output, debt servicing, GDP per capita, growth rate