Debt Financing and Economic Growth: Evidence of Nigeria Economy

Akpovofene Erhinyodavwe J. and Oghenevwo P. Kpolode
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Akpovofene Erhinyodavwe J.: Department of Accountancy,Niger Delta University, Amasoma, Bayelsa State, Nigeria
Oghenevwo P. Kpolode: Department of Accountancy,Niger Delta University, Amasoma, Bayelsa State, Nigeria

International Journal of Research and Scientific Innovation, 2023, vol. 10, issue 7, 78-83

Abstract: We analyzed implication of debt financing on Nigeria economic growth, by considering all the debt elements such as total external debt, FGN only, states & FCT, total domestic debt, FGN only and states & FCT, with the help of multiple regression on data covering from 2010 to 2022 and discovered that; debt finance has a positive correlation and impact on economic growth, the statistical value also reveal a very significant positive relationship among the variables at 0.0000, which negated our null hypothesis proposed above. Our model is also statistically significant with a probability level of 0.000041, at a confidence level of 87% approximately. Therefore we recommended that: Debt employed by government should be cannel into more productive sector in order to yield more positive returns; Comparative analysis, i.e., cost benefit analysis should be carryout by government officials before engaging in borrowing; and there should be proper monitoring of borrowed fund, in order to avoid diversion.

Date: 2023
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