Impact of Public Debt on Poverty in Nigeria: A Vector Autoregressive Analysis
Catherine Chidinma Mbah
*
Department of Economics, Nnamdi Azikiwe University, Awka, Anambra State, Nigeria.
Chizoba Linda Tevin-Anyali
Department of Economics, Nnamdi Azikiwe University, Awka, Anambra State, Nigeria.
Chike Okoli Kingsley
Department of Economics, Nnamdi Azikiwe University, Awka, Anambra State, Nigeria.
Emilia. Mukaosolu Mgbemena
Department of Economics, Chukwuemeka Odumegwu Ojukwu University Igbariam, Anambra State, Nigeria.
*Author to whom correspondence should be addressed.
Abstract
This study examined the impact of public debt on poverty in Nigeria for the period 1985 to 2021. The study regressed poverty against public debt in a vector error correction model using the Johansen approach. The study found a long-run relationship between public debt and poverty in Nigeria. The effect of public debt on poverty in Nigeria was found to be positive and permanent, becoming more pronounced with time. The study recommends the government’s deliberate effort in restraining continuous unsustainable public borrowing while also determining the maximum threshold at which debt servicing becomes poverty-reinforcing.
Keywords: Public debt, poverty, unsustainable public borrowing