Does Population Growth Affect Public Debt in Nigeria
DOI:
https://doi.org/10.64229/195r4596Keywords:
Population Growth, Public Debt, Hypothesis TestingAbstract
The study investigates the relationship between population growth and public debt in Nigeria over the period 1986-2024. Annual time series data on real gross domestic product (RGDP), gross fixed capital formation (GFCF), interest rate (INTR), labour force (LAB), and population (POP) were utilized. The analysis employed the Autoregressive Distributed Lag (ARDL) model, given that the variables exhibited a mixed order of integration, I(0) and I(1). The empirical results reveal the existence of a long-run equilibrium relationship between population growth and public debt. Specifically, increases in real GDP and expansion in the labour force were found to mitigate debt pressures. The computed F-statistic of 4.684 exceeds the upper bound critical value (I(1) = 3.920) and the lower bound (I(0) = 2.734), confirming the presence of cointegration among the variables. Furthermore, the error correction term indicates that approximately 82% of deviations from the long-run equilibrium are corrected annually, provided that appropriate macroeconomic policies are implemented. Additionally, the causality analysis establishes a bidirectional relationship between population growth (POP) and public debt (DS). Based on these findings, the study recommends that the government intensify investment in human capital development, particularly in education, healthcare, and vocational training. Such investment would enhance the productivity of the growing population, stimulate economic growth, and improve revenue generation, thereby reducing the country’s dependence on external borrowing.
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