ANALYSIS OF THE IMPACT OF PUBLIC DOMESTIC DEBT ON PRIVATE INVESTMENT IN NIGERIA
Sheriff Alade Bamidele, Dahiru Idris and Mubarak Tahir Abubakar
Volume 9 Issue 2
Abstract
The study analyze the impact of public Internal debt on private investment in Nigeria using a secondary time series data on components of public Internal debt and private investment, the research was analyzed using ARDL bound testing approach within the framework of Barro-ricardo equivalence theory to investigate the impact of public domestic debt on private investment in Nigeria between the period of 2006Q1 to 2021Q4. The study found that there is a long run relationship among the variables. The ARDL model revealed the existence of long run and short run relationship betwixt banking sector debt, non-banking sector debt and private investment in Nigeria, it disclosed a negative long run and positive short run connections between public banking sector debt and private investment in Nigeria but disclosed a negative short run and long run impact of public non-banking sector debt on private investment in Nigeria. Base on this, the study recommend that the government should completely obliterate banking sector domestic loan and Non-banking sector domestic loans as these two debt will not only compete with private investors but will also chase away private individual from investing because they knew that government can only repay the loan with their future tax Keywords: Domestic Debt, Banking Debt, Non-banking Debt, Private Investment, ARDL
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