ABSTRACT
This thesis
investigated the effect of public borrowing on fixed capital formation in
Nigeria. For the purpose of the study,data on domestic debt, external debt and
gross fixed capital formation were collected from secondary sources - majorly
the CBN statistical bulletin and World Bank online database. The collected data
was analyzed using descriptive statistic, Auto-regressive Distributed Lag, Co-integration
and Granger Causality method. However, the data analysis waspreceded by a diagnostic
test using ADF and PP methods to ensure that the data set was stationary. The
findings showed that domestic borrowing has a positive effect oncapital
formation while external debt has a negative effect onformation capital development.
The results also show that on the long run, domestic debt has a positive effect
on formation capital while external debt has a negative effect. The results of
the Granger causality test show that domestic debt has a uni-directional
causality effect on formation capital. Finally, the findings indicateuni-directional
causality between external debt and formation capital.Based on the findings, it
was concluded that: Domestic borrowing helps to increaseformation capital.However,
external borrowing has done more harm than good to the Nigerian economy. Both
domestic and external borrowing causes change formation capital. In view of the
above, it is recommended that: Domestic borrowing should as much as possible be
used in place of external borrowing to fund formation capital. Stringent
measures must be put in place to ensure that all external borrowing are not
only tied to specific projects but also that such projects are closely
monitored from start to finish to forestall the problem of diverting funds.
MICHAEL, U (2023). Impact Of Public Debt On Capital Formation In Nigeria . Repository.mouau.edu.ng: Retrieved Nov 05, 2024, from https://repository.mouau.edu.ng/work/view/impact-of-public-debt-on-capital-formation-in-nigeria-7-2
UNIVERSITY, MICHAEL. "Impact Of Public Debt On Capital Formation In Nigeria " Repository.mouau.edu.ng. Repository.mouau.edu.ng, 03 Jul. 2023, https://repository.mouau.edu.ng/work/view/impact-of-public-debt-on-capital-formation-in-nigeria-7-2. Accessed 05 Nov. 2024.
UNIVERSITY, MICHAEL. "Impact Of Public Debt On Capital Formation In Nigeria ". Repository.mouau.edu.ng, Repository.mouau.edu.ng, 03 Jul. 2023. Web. 05 Nov. 2024. < https://repository.mouau.edu.ng/work/view/impact-of-public-debt-on-capital-formation-in-nigeria-7-2 >.
UNIVERSITY, MICHAEL. "Impact Of Public Debt On Capital Formation In Nigeria " Repository.mouau.edu.ng (2023). Accessed 05 Nov. 2024. https://repository.mouau.edu.ng/work/view/impact-of-public-debt-on-capital-formation-in-nigeria-7-2