Impact of National Debt Burden on Economic Stability in Nigeria

The study argues that national debt becomes a burden when debt overhang is rising, a foreign reserve is inadequate to cover short-term external debt and government revenue is inadequate for debt servicing. This paper investigates the impact of national debt burden on economic stability in Nigeria. D...

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Autores principales:	Onyele Kingsley Onyekachi, Nwadike Emmanuel Chijioke
Formato:	article
Lenguaje:	EN
Publicado:	Sciendo 2021
Materias:	autoregressive distributed lag (ardl) debt burden debt servicing economic stability exchange rate nigeria reserves e62 f31 g31 p24 Business HF5001-6182 Economics as a science HB71-74
Acceso en línea:	https://doaj.org/article/36706204a4294c978da6b6c655bd1be3
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spelling	oai:doaj.org-article:36706204a4294c978da6b6c655bd1be32021-12-05T14:11:06ZImpact of National Debt Burden on Economic Stability in Nigeria2256-039410.2478/eb-2021-0006https://doaj.org/article/36706204a4294c978da6b6c655bd1be32021-01-01T00:00:00Zhttps://doi.org/10.2478/eb-2021-0006https://doaj.org/toc/2256-0394The study argues that national debt becomes a burden when debt overhang is rising, a foreign reserve is inadequate to cover short-term external debt and government revenue is inadequate for debt servicing. This paper investigates the impact of national debt burden on economic stability in Nigeria. Data spanning from 1981 to 2019 have been collated from the World Development Indicators and Central Bank of Nigeria Statistical Bulletin, 2019 edition. Consequently, the variables used to measure debt burden are total debt-to-GDP ratio (debt overhang), short-term external debt-to-reserves ratio (reserve adequacy) and debt service cost-to-government revenue ratio (revenue adequacy) with exchange rate as a control variable, while economic stability is measured with real GDP growth rate. The Autoregressive Distributed Lag (ARDL) model is used for the analysis since the variables are stationary at both levels and first difference. The ARDL estimation shows that the explanatory variables collectively cause a diminishing impact on economic stability in the long run with revenue adequacy having a negative and significant impact. In the short run, all the components of debt burden, except debt overhang, have a negative and significant impact on economic stability. Under this circumstance, exchange rate has a positive and significant impact on economic stability in the long run.Onyele Kingsley OnyekachiNwadike Emmanuel ChijiokeSciendoarticleautoregressive distributed lag (ardl)debt burdendebt servicingeconomic stabilityexchange ratenigeriareservese62f31g31p24BusinessHF5001-6182Economics as a scienceHB71-74ENEconomics and Business, Vol 35, Iss 1, Pp 91-106 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	autoregressive distributed lag (ardl) debt burden debt servicing economic stability exchange rate nigeria reserves e62 f31 g31 p24 Business HF5001-6182 Economics as a science HB71-74
spellingShingle	autoregressive distributed lag (ardl) debt burden debt servicing economic stability exchange rate nigeria reserves e62 f31 g31 p24 Business HF5001-6182 Economics as a science HB71-74 Onyele Kingsley Onyekachi Nwadike Emmanuel Chijioke Impact of National Debt Burden on Economic Stability in Nigeria
description	The study argues that national debt becomes a burden when debt overhang is rising, a foreign reserve is inadequate to cover short-term external debt and government revenue is inadequate for debt servicing. This paper investigates the impact of national debt burden on economic stability in Nigeria. Data spanning from 1981 to 2019 have been collated from the World Development Indicators and Central Bank of Nigeria Statistical Bulletin, 2019 edition. Consequently, the variables used to measure debt burden are total debt-to-GDP ratio (debt overhang), short-term external debt-to-reserves ratio (reserve adequacy) and debt service cost-to-government revenue ratio (revenue adequacy) with exchange rate as a control variable, while economic stability is measured with real GDP growth rate. The Autoregressive Distributed Lag (ARDL) model is used for the analysis since the variables are stationary at both levels and first difference. The ARDL estimation shows that the explanatory variables collectively cause a diminishing impact on economic stability in the long run with revenue adequacy having a negative and significant impact. In the short run, all the components of debt burden, except debt overhang, have a negative and significant impact on economic stability. Under this circumstance, exchange rate has a positive and significant impact on economic stability in the long run.
format	article
author	Onyele Kingsley Onyekachi Nwadike Emmanuel Chijioke
author_facet	Onyele Kingsley Onyekachi Nwadike Emmanuel Chijioke
author_sort	Onyele Kingsley Onyekachi
title	Impact of National Debt Burden on Economic Stability in Nigeria
title_short	Impact of National Debt Burden on Economic Stability in Nigeria
title_full	Impact of National Debt Burden on Economic Stability in Nigeria
title_fullStr	Impact of National Debt Burden on Economic Stability in Nigeria
title_full_unstemmed	Impact of National Debt Burden on Economic Stability in Nigeria
title_sort	impact of national debt burden on economic stability in nigeria
publisher	Sciendo
publishDate	2021
url	https://doaj.org/article/36706204a4294c978da6b6c655bd1be3
work_keys_str_mv	AT onyelekingsleyonyekachi impactofnationaldebtburdenoneconomicstabilityinnigeria AT nwadikeemmanuelchijioke impactofnationaldebtburdenoneconomicstabilityinnigeria
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Impact of National Debt Burden on Economic Stability in Nigeria

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