Abstract
This study was carried out to ascertain the impact of public debt on economic development in
Nigeria from 1981 to 2018. Ex – post facto research design was employed; data used for
analysis were elicited from Central Bank Statistical Bulletin of 2018 and World Bank
Database: World Development Indicator 2018. Gross fixed capital formation was employed as
the dependent variable, while foreign debt and domestic debt were utilized as proxy for public
debt and exchange rate was employed as a control variable. This study employed Auto
Regressive Distributed Lag (ARDL) Model to analyze data, other diagnostic tests such as; test
of Normality, Auto correlation test, Heteroskedasticity test and Breusch-Godfrey Serial
Correlation LM test were also carried out and they confirmed the validity and reliability of the
model employed; the inferential results suggested that public debt had positive and significant
impact on economic development in Nigeria. The study recommended that since both foreign
and domestic debt had positive significant impact on economic development in Nigeria,
government should continue borrowing to finance the national budget and achieve key macro-
economic goals such as price stability, improvement in standard of living, provision of social
and economic amenities amongst others, which will bring about economic development in
Nigeria.
References
Angkinand, A. P. (2009). Banking regulation and the output cost of banking crises. Journal of
International Financial Markets, Institutions and Money, 19(2); 240 – 257.
Bartholdy, J. Boyle, G. W., and Stove, R. D. (2003). Deposit Insurance and the risk premium
in bank deposit rates, Journal of Banking & Finance, 2(4);699 – 717..
Blair, C. E. Carns, F. and Kushmeider, R. M. (2017). Instituting adeposit insurance system:
Why? How? Palm Grove: Macmillan Publishers.
Boyd, J. H. Chang, C. and Smith, B. D. (2012). Deposit insurance: A reconsideration. Journal
of Monetary Economics. 49:1235 – 1260.
CBN Annual Reports and Accounts of various years.
Clifford F. T. Daniel, C. F. and Gerlowski, D. A. (2009) Insurance.A history of failure”. Cato
Journal. 8(3); 677 – 693.
Demirguc – Kunt, A. and Detragiache, E. (2010). “Does deposit insurance increase banking
system stability? An empirical investigation. International Monetary Fund, Research
Department Working Paper, Washington DC.
Demirguc – Kunt, A. and Kane, E. J. (2012).“Deposit insurance around the globe. Where does
it work? Working Paper – World Bank.
Ebohodaghe, J. U. (2015). “Causes and environmental effects of bank failure in Nigeria”.NDIC
Quarterly.5(3); 15 – 25.
Ekechi, A. O. (2011). “Bank failure or panics: Do we actually need deposit insurance? First
Bank Quarterly Review, . 16 – 28.
Garacia, G. H. (2009): “Depoistinsurance, a survey actual and best practices”. IMF Working
Paper No. WP/99/54.
Gueyie, J. P. and La, V. S. (2012): Bank moral hazard and the introduction of official deposit
insurance in Canada. International Review of Economics & Finance. 12 (2); 247 – 273.
Helfer, R. T. (2013). “What can deposit insurance do? IMF Financial Development.36(1); 320
– 350.
Kane, J. E. (2013). “What kind of multinational deposit insurance arrangements might best
enhance world welfare? Pacific–Basin Financial Journal. 11:413 – 428.
Karels, G. U and McClatchy, C. A. (2010), “Deposit insurance and risk talking behaviour in
the credit union industry. Journal of Banking and Finance. 23, 105 – 134.
Leaven, L. (2014).“International evidence on the value of deposit insurance”.The Quarterly
Review of Economic and Finance. 42 (9), 721 – 732
Mishkin, F. S. (2015). Financial consolidation dangers and opportunities”.Journal of Banking
and Finance. 23 (2-4); 675 – 691.
NDIC Annual Reports of Various Years.
Nigerian Deposit Insurance Act No 16 of 2006 (NDIC Act).
Ogunleye, G. A. (2014). “The causes of bank failures and persistent distress in the banking
industry”.NDIC Quarterly.13 (4); 21 – 41.
Obim, E.N.(2013). The impact of risk on household income in Nigeria. Annuals of Humanities
and Development studies,4(1); 105-113
Park, S. (1996). “Banking and deposit insurance as a risk transfer mechanism”. Journal of
Financial Intermediation. 5 (3); 284 – 304.
Williamson, S. D. (2008). Discount window lending and deposit insurance..Review of
Economic Dynamics,. 1(1); 246 – 275.
