Debt Management and Gross Domestic Product: Lessons from the Nigerian Economy

Abstract

The paper examined the fundamentals of debts accumulation and management in Nigerian economy and the extent to how itsignificantly influenced the Gross Domestic Product (GDP) to an appreciable level. The methodology was a time series data of the gross domestic product from 1990 to 2019 on one hand and debt growth from 1990 to 2019 on the other hand. Several literatures posited that Nigeria has always been at the mercy of externaland internal creditors via incessant loans accumulation and this in return consume a chunk of the expected revenue that is meant to implement the capital project aspect of the budget. The findings revealed that there is a negative relationship between debt accumulated overtime and the GDP in successive years, meaning that debt has always increased consistently within the years but GDP has not grown reasonably to justify the debt increase. The study concluded that now that government seems to have an unquenchable thirst for debt, it is expected that more efforts should be geared towards planning to manage our debts responsibly and efficiently to the good of all.The study finally recommended on the urgent need for the Nigerian economy to be diversified aggressively to other sources of revenue like solid minerals and agriculture since it is conspicuous from the study that most of the these critical sectors might not have felt the impact of the borrowed funds. It is also important that borrowed fund be used for the purpose they are meant so that by so doing the Gross Domestic Product (GDP) would be enhanced