Public Debt, Fiscal Stability and Economic Growth in Nigeria

Résumé

This study examines Nigeria's public debt and its impact on fiscal stability. It aims to provide insights into how Nigeria can navigate debt challenges for
sustainable economic growth while maintaining fiscal stability. The paper reveals Nigeria’s significant increase in external debt from 14% to 40%
between 2012 and 2022, affecting Nigeria's development agenda. High borrowing costs and a significant portion of public revenue being allocated to
debt servicing have led to reduced investments in critical sectors like education, health, and infrastructure. The paper also discusses the concept of
debt overhang and its deterrent effect on investment and economic growth. It also discusses the role of fiscal policy in managing public debt and ensuring
fiscal stability. The study assesses the sustainability of Nigeria's public debt policy and its contribution to trade deficits. It also investigates the impact of
various components of the national debt burden on economic stability. The study recommends optimizing the debt structure, generating revenue beyond
oil, improving tax administration, and implementing public financial management reforms. It also emphasizes the need for anti-corruption
measures to enhance expenditure efficiency and fiscal discipline.