Abstract
This study empirically evaluated the impact of deficit
financing on economic growth of Nigeria between 1981 and 2017. Auto Regressive
Distributed Lag (ARDL) model and Bounds Test were adopted as the estimating
techniques to verify the existence of long-run relationship between deficit
financing and economic growth in Nigeria. Real gross domestic product was used
as the dependent variable, while government budget deficit, government total debt,
exchange rate and government expenditure were used as the explanatory or
independent variables. Data used were extracted from the Central Bank of
Nigeria statistical bulletin of 2018. The empirical results of Auto Regressive
Distributed Lag (ARDL) model revealed that all the variables except exchange
rate had positive and significant impact on real gross domestic product.
Exchange rate had a negative and significant impact on real gross domestic
product. This study recommended that Budget deficit should only be employed as
the last resort, when it is absolutely necessary to budget for a deficit, the
government should try as much as possible to mitigate the proportion of the
overall deficits financed from external or foreign sources and finance budget
deficit with domestic debt since it has a positive and significant impact on
real gross domestic product. This will reduce the amount of foreign debt and
its negative consequences.
UMOH, U (2023). Impact Of Deficit Financing On Eonomic Growth Of Nigeria. Repository.mouau.edu.ng: Retrieved Sep 08, 2024, from https://repository.mouau.edu.ng/work/view/impact-of-deficit-financing-on-eonomic-growth-of-nigeria-7-2
UMOH, UMOH. "Impact Of Deficit Financing On Eonomic Growth Of Nigeria" Repository.mouau.edu.ng. Repository.mouau.edu.ng, 12 May. 2023, https://repository.mouau.edu.ng/work/view/impact-of-deficit-financing-on-eonomic-growth-of-nigeria-7-2. Accessed 08 Sep. 2024.
UMOH, UMOH. "Impact Of Deficit Financing On Eonomic Growth Of Nigeria". Repository.mouau.edu.ng, Repository.mouau.edu.ng, 12 May. 2023. Web. 08 Sep. 2024. < https://repository.mouau.edu.ng/work/view/impact-of-deficit-financing-on-eonomic-growth-of-nigeria-7-2 >.
UMOH, UMOH. "Impact Of Deficit Financing On Eonomic Growth Of Nigeria" Repository.mouau.edu.ng (2023). Accessed 08 Sep. 2024. https://repository.mouau.edu.ng/work/view/impact-of-deficit-financing-on-eonomic-growth-of-nigeria-7-2