INVESTIGATING THE NEXUS BETWEEN PUBLIC DEBT MANAGEMENT AND INCLUSIVE GROWTHIN NIGERIA: AN ARDL ANALYSIS
Keywords:
Public Debt Management, Inclusive Growth, Human Development Index (HDI), Human Capital Development, ARDL; NigeriaAbstract
The rapid increase in Nigeria's public debt has generated growing concerns regarding its implications for inclusive growth and human capital development. Although public borrowing is intended to finance infrastructure healthcare and other development priorities, rising debt-servicing obligations have increasingly constrained fiscal space, limiting government investment in critical social sectors. This study examines the impact of public debt management on inclusive growth and human capital development in Nigeria using annual time-series data covering the period 1980–2024. Inclusive growth is proxied by the Human Development Index (HDI), while the public debt-to-GDP ratio, total public debt and domestic debt servicing as the explanatory variables. Data were obtained from the Central Bank of Nigeria (CBN), Debt Management Office (DMO), World Development Indicators (WDI), and the United Nations Development Programme (UNDP). The study employs the Autoregressive Distributed Lag (ARDL) modelling technique to estimate the short-run and long-run relationships among the variables. The findings reveal the existence of a stable long-run relationship between public debt management and inclusive growth. Specifically, a sustainable public debt-to-GDP ratio exerts positive and statistically significant effects on human capital development, whereas excessive public debt negatively influences it. Furthermore, domestic debt servicing constrains fiscal resources in the short run but contributes to long-run fiscal sustainability when supported by prudent debt management practices. The study concludes that the developmental impact of public borrowing depends more on the quality of debt management and the productive utilization of borrowed resources than on the volume of debt accumulated. It therefore recommends strengthening debt sustainability frameworks, improving fiscal transparency and accountability, and ensuring that borrowed funds are channeled toward productive sectors capable of fostering inclusive growth and sustainable human capital development in Nigeria.
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