INTERNATIONAL JOURNAL OF ACCOUNTING, FINANCE AND TAXATION

DEBT SERVICING AND ECONOMIC GROWTH IN NIGERIA

Ogboru-Michael, Titi, Ebele Patricia Ifionu
April 7, 2026

Abstract

Rising level of public debt and surged debt servicing obligations have become major problems for economic stability and growth in Nigeria. A large proportion of revenue by governments is often spent on debt repayment and there is concern as to the effect of debt servicing on growth. This study investigated the relationship between debt servicing and economic growth in Nigeria where the proxies for debt servicing were domestic debt servicing (DDS) and foreign debt servicing (FDS), while the indicator of economic growth was the gross domestic product (GDP). The research was based on the debt overhang theory, Keynesian theory of public debt, and the Solow growth theory. The research design used in this study is ex-post facto research design and the philosophy of research used is positivism. Secondary time series data spanning the time-period 1986 to 2024 were obtained from the Central Bank of Nigeria Statistical Bulletin and World Bank Developments Indicators. The population of the study were Nigeria's macroeconomic data in the study period and the sample size were 39 annual data selected with the help of census sampling technique. Data were analysed by adopting methods of descriptive statistics, Augmented Dickey-Fuller Unit Root Test, cointegration test of Johansen and ECMs were parsimonious error correction model (ECM) at 5% level of significance. The results showed that domestic debt servicing is negatively and significantly impacting GDP, whereas the foreign debt servicing has a positive and significant impact on economic growth in Nigeria. The study therefore concludes that excessive domestic debt servicing is growth inhibiting whereas productive use of foreign borrowing may be growth fostering. The study recommends prudent debt management at the domestic level, productive use of external debt and enhanced fiscal transparency. The research contributes to the knowledge by highlighting the empirical evidence regarding differential impacts of domestic and foreign debt servicing on economic growth in Nigeria.

Download Full PDF

This article is available as a PDF download

INTERNATIONAL JOURNAL OF ACCOUNTING, FINANCE AND TAXATION

Published in INTERNATIONAL JOURNAL OF ACCOUNTING, FINANCE AND TAXATION

ISSN: 3027-0378

This article appears in our peer-reviewed academic journal

View Journal

Related Articles

Explore similar research in our collection

INFLUENCE OF FORENSIC ACCOUNTING INTELLIGENCE ANALYTICS ON MULTIDIMENSIONAL INVESTMENT FRAUD PREVENTION: EVIDENCE FROM PROFESSIONAL FORENSIC EXPERTS IN NIGERIA

Foluke Rachael Oduwole, Alexander Tunde Oguntuase

Jul 21, 2026

This study examined the influence of Forensic Accounting Intelligence Analytics (FAIA) on investment...

View Article

BANKS’ CREDITS AND ECONOMIC GROWTH IN NIGERIA A SECTORAL ALLOCATION APPROACH

Mgbataogu, Ifeanyi S.(PhD), Omire Chinweuba C. (PhD), Ikue-john, Tamny S. (DBA)

Jun 27, 2026

Acknowledging the significance of bank credits as a veritable avenue through which the gap in the av...

View Article

Corporate Social Responsibility, Audit Quality and Financial Performance of Deposit Money Banks in Nigeria.

Aiyesan O.O

Jun 26, 2026

The study examined the influence of corporate social responsibility, audit quality and financial per...

View Article