COMPARATIVE ANALYSIS OF TREASURY BILL INSTRUMENT ON ECONOMIC GROWTH IN NIGERIA AND GHANA
Ladan, Yakubu Ishaleku , Ilemona Adofu, PhD and Alhassan Abdulkareem, PhD
Volume 13 Issue 1
Abstract
This study delved into the intricate relationship between treasury bills and economic growth in two Key West African nations of Nigeria, and Ghana over the period from 1981 to 2023 The research adopts a comprehensive comparative approach, employing a suite of advanced econometric techniques of Augmented Dickey Fuller (ADF) Unit root test, Philip Perron (PP) unit root test to ascertain the Stationarity of data used to analyze the dynamics of Treasury bill and its effects on economic performance. Furthermore, the study leveraged the Autoregressive Distributive Lag (ARDL) model, to capture both short-term and long-term relationships between the variables. The primary focus of the study is to determine the effect of Treasury Bills variables, alongside employment (LAB) and gross government fixed capital formation (GFCF) as explanatory and control variables, with Real Gross Domestic Product (RGDP) serving as the dependent variable and proxy for growth. The analysis reveals a nuanced relationship between treasury bills and economic growth, with treasury bills instruments generally exerting a positive influence on economic growth in the short term. However, the findings also indicate that excessive levels of treasury bills can act as a drag on long-term growth, underlining the importance of prudent debt management. Country-specific insights further enrich the study's findings. In Nigeria, Treasury Bills are shown to have a significant and positive impact on economic growth, reflecting the country's reliance on short-term financing. Conversely, in Ghana, the study identifies a negative impact of Treasury Bills, cautioning against over-reliance on these instruments. Treasury Bonds emerge as a crucial driver of growth in Ghana. Keywords: Treasury Bills, Economic Growth, Comparative analysis, Nigeria
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