ABSTRACT
The
impact of different types of domestic debt on economic growth of Nigeria was
studied using multiple regression technique. Outcome of the study indicates that
in the short run, FGN Bond proved to have a positive significant relationship
with economic growth, while Development stock maintained a significant
negative relationship. In the long run; Treasury Bills and the lagged value of
GDP (in the second year), taken as independent variables were found to be
positively significant. Result of the Granger causality test revealed
that,while there is a unidirectional relationship between economic growth and
FGN Bonds on one hand, there exists unidirectional relationship between
Treasury bills and economic growth on the other hand. The study,
therefore commends that, it is not a bad idea after all borrowing from within,
since debt could be deployed to good purposes. However, the rule of thumb is
that the returns (for a business) and societal welfare (in the case of
a government) derivable from deploying the funds generated from the loans must surpass the interest being paid on
such loan. As a way out of the woods, government must undertake an aggressive
cut-down of her bogus burgeoning recurrent expenditure which is over 70% of the
total expenditure profile. This will help free up the much-needed savings for
infrastructural development. The study further recommends that the Nigerian government should
stop accumulating unproductive debts that have no positive multiplier effect.
If at all sh emust borrow from within, then such loans must be tied to some
specific, viable and growth enhancing projects that could pay its way through.
TABLE OF
CONTENTS
Title page
List of tables
Abstract
CHAPTER ONE – INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Research Questions
1.5 Research Hypothesis
1.6 Significance of the Study
1.7 Scope of the Study
1.8 Limitations of the Study
1.9 Operational Definition of Terms
CHAPTER TWO – LITERATURE REVIEW
2.1 Theoretical Framework
2.2 Conceptual Framework
2.3 Empirical Studies
2.4 Summary of Literature Review
CHAPTER THREE – RESEARCH METHODOLOGY
3.1 Introduction
3.2 Research Design
3.3 Sources of Data Collection
3.4 Instrument of Data Collection
3.5 The population of the Study
3.6 Sample and Sampling Technique
3.7 Reliability and Validity of Data and Test
Instrument
3.8 Data Analysis Technique
CHAPTER FOUR – DATA PRESENTATION AND
ANALYSIS
4.1 Introduction
4.2 Analysis of Data
4.3 Test of Research Hypothesis
CHAPTER FIVE – SUMMARY OF FINDINGS,
CONCLUSION AND
RECOMMENDATIONS
5.1 Summary of Findings
5.2 Conclusion
5.3 Recommendations
References
Appendix
CHAPTER ONE
1.0
INTRODUCTION
1.1
Background of the Study
Debt is an outstanding credit
obligation. It refers to payment which must be, but has not yet been paid
to somebody. Legally, debt is a choice in action transferable by the creditor to
some other person provided that the transfer is in writing and that whole and
not merely a part of the debt is so assigned ( Anyafo, 1995).
Public debt is an amount of money owed
by the government to institutions, government agencies and other bodies either
resident in or outside a country. When debts are owed to residents within a
country, it is known as domestic public debt. Specifically in Nigeria, the
sources of domestic public debt are the central bank of Nigeria,commercial
banks, merchant banks and the non bank public (Nzotta, 2004).
It is the objective of every sovereign
nation to improve the standard of living of its citizenry and to promote
her economic well being. Due to the scarcity of resources, nations borrow from
within and externally to foster economic growth and to achieve sustainable
economic development (Adepoju, Salau & Obayelu, 2007). The necessity for
governments to borrow in order to finance a deficit budget has led to the
development of both internal and external debts (Osinubi & Olaleru, 2006, Obadan,
2004).
By way of definition, domestic debts
refer to the portion of a country's debt that was borrowed from within
the confines of a country. These loans are usually obtained from the central
bank of Nigeria, deposit money banks,discount houses and other non bank
financial houses. This study therefore is set to assess the degree to which
the different components of domestic debts have impacted on the economic growth
of Nigeria over the period 1980-2014.
1.2 Statement of Research Problem
The reliance by the federal government
in borrowing from the banking system, particularly the CBN, to finance its large
and unsustainable fiscal deficits has hindered the attainment of macroeconomic
stability and sustainable economic growth in Nigeria. In addition, this has
crowded out the private sector from the credit market, thereby stalling
investment and output growth. A review of Nigeria’s domestic debt profile
indicates that, it has been on the increase in recent times. Various factors
account for the phenomenal rise. This includes the increased financing needs of
government for developmental purposes and other socio –economic needs before the
advent of the oil boom. There was also the need to finance the large fiscal
deficits of the government after the oil boom period. Other factors include
the financing gaps in the government revenue-expenditure profile and other
financing needs of the government. All these had led to the enhanced domestic
debt stock of Nigeria In spite of her continued penchant for domestic loans,
Nigerian economy is still characterized by low per capital income, high
unemployment rates, dwindling economies, inadequate basic amenities and poor
infrastructural developments and falling growth rates of GDP; problems that
publicly procured funds are supposed to take care of. Paradoxically; it does not
appear as if our craving for domestic loans is in any way commensurate to our
low level of economic growth and development.
The natural question that readily comes
to mind is: What has our leaders and the political class been doing with the
huge sums of money procured on our behalf as domestic debts and how beneficial
has these sources of loans been to the economic growth of Nigeria? It is against
this background that this study will seek to investigate the various components
of our domestic debt profile. This is with a view to ascertaining the usage, to
which the proceeds were put, and the direction / significance of the effects of
such funds. - That is the crux of the matter!
1.3 Research Questions
This study will be addressing these
research questions
1)
what is the nature of the relationship
between domestic debt and economic growth in Nigeria with the period under
review?
2)
What is the impact of domestic debt on
economic growth of Nigeria?
1.4 Research Objective
The broad
objective of this study is to ascertain the impact of domestic debt on economic
growth of Nigeria.
Specifically,
the objectives of this study include:
1. To ascertain the relationship between domestic debt
and economic growth of Nigeria.
2. To find out the impact of domestic debt on economic
growth of Nigeria.
Centrally, the study is intended to
ascertain the impact of domestic debt on the economic growth of Nigeria. It will
investigate the mismatch between the huge domestic debts incurred by Nigeria,
within the period (1980-2014) and the stunted level of economic growth in
Nigeria. The study will seek to determine the impact of domestic debts procured
through Treasury bills, Treasury certificates and Treasury Bonds on the economic
growth of Nigeria. It will also seek to determine the impact of Development
stock, FGN Bonds and Promissory notes on the economic growth of Nigeria, herein,
represented by Gross Domestic Product(GDP).
1.5 Hypothesis of the study:
The following hypotheses shall be tested
in this study:
Ho1: There is no
significant relationship between the Domestic debt and economic growth in
Nigeria.
Ho2: Domestic debts
has no significant impact on economic growth in Nigeria
1.6 Scope of the Study
Domestic debt and economic growth is a
very broad area. This study as a matter of fact is limited only to the Nigerian
economy. The scope of investigation is delineated from 1980-2014, a period of
35 (thirty five years).
================================================================
Item Type: Project Material | Attribute: 52 pages | Chapters: 1-5
Format: MS Word | Price: N3,000 | Delivery: Within 30Mins.
================================================================
No comments:
Post a Comment