Public Debt and Infrastructural Development in Nigeria

The objective of this paper is to examine the differential effects of the composition of public debt on infrastructural development in Nigeria from 1986 to 2021 using Autoregressive Distributed Lag Model (ARDL) and Error Correction Model as the major econometrics’ techniques of analysis. The Keynesian Growth theory was employed and the sample period covered 36 years with data obtained from World Bank Indicators (WDI) database and Nigerian Central Bank Statistics Bulletin (CBN, 2024).From the findings, the CointEq(-1) has 94% speed of adjustment to the long run or equilibrium value. The short-run findings show that external debt, debt servicing and exchange rate are statistically significant with negative influence on Access to Electricity (AE) as a proxy for infrastructural development, while only domestic debt exhibits positive impact in the short-run. In the long-run, both domestic and external debts have positive long-run impact on AE. However, debt servicing, inflation rate and interest rate have negative impact on AE in the long run. The study concluded that external dept has not been impactful on infrastructural development in Nigeria. It is therefore recommended that Nigeria government should cut down excessive external borrowings in order to keep down the negative impact of debt servicing. Also, economics policy that will ensure macroeconomic stability such as price stability, job creation, increased output, political stability should be adopted.