International Journal of Applied Research
Vol. 5, Issue 3, Part D (2019)
Public Debt and inflation in Nigeria: An econometric analysis
This study examined the relationship between public debt and inflation in Nigeria for the period 1981 to 2017. The Augmented Dickey-Fuller (ADF) test, co-integration test and Error Correction Model (ECM), were employed in the analysis. The results of the analyses revealed that public debt, exchange rate and money supply has positive and significant impact on inflation in Nigeria. Also, real GDP growth rate has negative and statistically insignificant impact on inflation in Nigeria. The study recommends that government should sustain lower inflation rate through tight fiscal and monetary policies, financing of budget deficit from non-inflationary sources, implementation of price stabilization program by subsiding basic food items, and effectively managing public debt. Also, government should propose polices to reduce the public debt, through enhancing the tax base and lowering expenditures through structural reforms.
How to cite this article:
Dr. CI Ezeanyeji, Imoagwu Chika Priscilla, Ejefobihi Ugochukwu Frank. Public Debt and inflation in Nigeria: An econometric analysis. Int J Appl Res 2019;5(3):219-224.