DEBT AND GOVERNMENT REVENUE: SIGNIFICANCE ON INFRASTRUCTURAL DEVELOPMENT IN NIGERIA
Debt And Government Revenue: Significance On Infrastructural Development In Nigeria
Gilbert Deinde Ifarajimi: Department of Accounting and Finance, Samuel Adegboyega University, Ogwa, Edo State
Daniel Chibueze Onyejiuwa: Department of Economics Samuel Adegboyega University, Ogwa, Edo State
This paper examined the significance of debt and government revenue on the development of infrastructure in Nigeria between 1981 and 2016. Using data collected from the Central Bank of Nigeria (CBN) Statistical Bulletin, the study adopted Park (1992) Canonical Co-integration regression (CCR) technique of analysis as opposed to other studies that used Vector Autoregressive Error Correction Model (VECM), Ordinary Least Square (OLS) and Error Correction Model (ECM). The variables used in the study were tested for stationarity using the Augmented Dickey Fuller and Philip Perron test. The result showed that the variables are stationary at first difference. Co-integration test was also performed and the result revealed the presence of co-integration between public debt and government revenue. The co-integration results showed that government revenue have long run positive relationship with infrastructural development in Nigeria. The study revealed that CRR is more robust than OLS in its result and that government revenue and public debt coefficients were significant to influence changes in infrastructural development in Nigeria. However, while the effect of government revenue was positive on infrastructural development, the effect of public debt was negative. The paper concluded that only government revenue had long run positive relationship with infrastructural development and that external debt obtained during the period was not productive.
Key words: Public-debt, infrastructure, revenue, debt-trap, confounding-effect.