Effect of public debt and debt servicing on economic activities in Nigeria: determining the optimal thresholds

Attahir Abubakar

Effect of public debt and debt servicing on economic activities in Nigeria: determining the optimal thresholds

Attahir Abubakar^*

^*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution

Abstract

This study examines the threshold level beyond which public debt accumulation and debt service payment ceases to have a positive effect on economic activities in Nigeria. The study employed the Hansen’s sample splitting threshold model for analysis. The results of the estimated threshold regression models identified the optimal threshold values to lie between 19.11% - 56.50% debt to GDP ratio; 216.42% - 258.59% debt to revenue ratio; and 7.73% - 11.46% debt service to revenue ratio. The study recommended the need for the government to put a cap on public debt accumulation because the current ratios are just about the optimal threshold limits. Further, the debt service ratio shows the country to be on the verge of a liquidity crisis.

Original language	English
Title of host publication	11th SCF International Conference on Economic and Social Impact of Population Aging
Editors	Yilmaz Bayar
Publisher	ASECU
Pages	10-16
Number of pages	7
ISBN (Print)	9786254436550
Publication status	Published - 19 Dec 2020
Externally published	Yes
Event	11th SCF International Conference on the Economics and Social Impacts of the Population Aging - Bandirma Onyedi Eylul University, Turkey Duration: 19 Dec 2020 → 20 Dec 2020

Conference

Conference	11th SCF International Conference on the Economics and Social Impacts of the Population Aging
Country/Territory	Turkey
Period	19/12/20 → 20/12/20

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth

Keywords

public debt
economic growth
debt service
threshold
Nigeria

Access to Document

2020 12 14 Abubakar Public acceptedAccepted author manuscript, 419 KB

Cite this

@inproceedings{febbefd1ccc84f40ad3b799c5a09464c,

title = "Effect of public debt and debt servicing on economic activities in Nigeria: determining the optimal thresholds",

abstract = "This study examines the threshold level beyond which public debt accumulation and debt service payment ceases to have a positive effect on economic activities in Nigeria. The study employed the Hansen{\textquoteright}s sample splitting threshold model for analysis. The results of the estimated threshold regression models identified the optimal threshold values to lie between 19.11\% - 56.50\% debt to GDP ratio; 216.42\% - 258.59\% debt to revenue ratio; and 7.73\% - 11.46\% debt service to revenue ratio. The study recommended the need for the government to put a cap on public debt accumulation because the current ratios are just about the optimal threshold limits. Further, the debt service ratio shows the country to be on the verge of a liquidity crisis.",

keywords = "public debt, economic growth, debt service, threshold, Nigeria",

author = "Attahir Abubakar",

year = "2020",

month = dec,

day = "19",

language = "English",

isbn = "9786254436550",

pages = "10--16",

editor = "Yilmaz Bayar",

booktitle = "11th SCF International Conference on Economic and Social Impact of Population Aging",

publisher = "ASECU",

note = "11th SCF International Conference on the Economics and Social Impacts of the Population Aging ; Conference date: 19-12-2020 Through 20-12-2020",

}

TY - GEN

T1 - Effect of public debt and debt servicing on economic activities in Nigeria

T2 - 11th SCF International Conference on the Economics and Social Impacts of the Population Aging

AU - Abubakar, Attahir

PY - 2020/12/19

Y1 - 2020/12/19

N2 - This study examines the threshold level beyond which public debt accumulation and debt service payment ceases to have a positive effect on economic activities in Nigeria. The study employed the Hansen’s sample splitting threshold model for analysis. The results of the estimated threshold regression models identified the optimal threshold values to lie between 19.11% - 56.50% debt to GDP ratio; 216.42% - 258.59% debt to revenue ratio; and 7.73% - 11.46% debt service to revenue ratio. The study recommended the need for the government to put a cap on public debt accumulation because the current ratios are just about the optimal threshold limits. Further, the debt service ratio shows the country to be on the verge of a liquidity crisis.

AB - This study examines the threshold level beyond which public debt accumulation and debt service payment ceases to have a positive effect on economic activities in Nigeria. The study employed the Hansen’s sample splitting threshold model for analysis. The results of the estimated threshold regression models identified the optimal threshold values to lie between 19.11% - 56.50% debt to GDP ratio; 216.42% - 258.59% debt to revenue ratio; and 7.73% - 11.46% debt service to revenue ratio. The study recommended the need for the government to put a cap on public debt accumulation because the current ratios are just about the optimal threshold limits. Further, the debt service ratio shows the country to be on the verge of a liquidity crisis.

KW - public debt

KW - economic growth

KW - debt service

KW - threshold

KW - Nigeria

M3 - Conference contribution

SN - 9786254436550

SP - 10

EP - 16

BT - 11th SCF International Conference on Economic and Social Impact of Population Aging

A2 - Bayar, Yilmaz

PB - ASECU

Y2 - 19 December 2020 through 20 December 2020

ER -

Effect of public debt and debt servicing on economic activities in Nigeria: determining the optimal thresholds

Abstract

Conference

UN SDGs

Keywords

Access to Document

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Cite this